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WEF predicts crypto will be ‘integral part of economy’ despite bear market

By Darius McQuaid

Edited by Charlie Mellor

15:26, 3 January 2023

A sunset is reflected in the World Economic Forum’s plaque at Davos
The WEF took aim at regulators for “failing to create sensible regulations” surrounding crypto – Photo: Getty Images

The World Economic Forum (WEF) has predicted that – despite the bear market – crypto will “continue to be an integral part of the modern economy”.

The international, non-governmental lobbying organisation based in Cologny, Switzerland, made the comments in a report even after it acknowledged 2022 “was a terrible year for crypto” that saw the loss of $2trn (£1.6trn) in market value.

The WEF went as far as to say that 2022 was not just another crypto winter “but more of an ice age”. Additionally, the WEF took aim at regulators for “failing to create sensible regulations” surrounding crypto.

The report – which forms part of the WEF annual meeting, better known as Davos, that starts on 16 January 2023 – was written by Dante Disparte, chief strategy officer and head of global policy, at Circle.

The fintech firm is one of the founding company’s behind the stablecoin usd coin (USDC) – the other USDC founder being crypto exchange Coinbase (COIN).

USDC to USD

The dotcom bubble

In the report, Disparte compared crypto with the dotcom bubble that burst in the early 2000s and handed “over the future of the internet to more durable companies, business models and use cases". He added:

BTC/USD

69,800.75 Price
+5.220% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

XRP/USD

0.54 Price
+4.920% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.16 Price
+7.430% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

ETH/USD

3,654.56 Price
+17.930% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00
“Perhaps 2022 marks a handover of crypto technology and blockchain infrastructure to steadier hands.”

The head of global policy for Circle also remarked that 2022 was “littered with the tombstones of failed crypto firms and projects”.  

Despite this, Disparte added that while “the underlying technology of cryptography and blockchain is generalisable to all industries… experimentation at the core of financial services, among other sectors, continues unabated”.

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JPMorgan’s ‘volte-face on policy to crypto’

Disparte also commented on JPMorgan and its “most famous volte-face on policy towards crypto and blockchain”.

Jamie Dimon, CEO of JPMorgan, is a well-known crypto sceptic, but in May 2021, the CEO told the Wall Street Journal that he was not a “supporter” of bitcoin (BTC) and that he didn’t “care about bitcoin”. Still, he did add: “On the other hand, clients are interested, and I don’t tell clients what to do.”

In July 2021, JPMorgan became the first major US bank to give all its wealth management clients access to cryptocurrency funds. This was according to an internal JPMorgan memo obtained by Business Insider.

BTC to USD

Markets in this article

COIN
Coinbase Global Inc (Extended Hours)
227.43 USD
18.49 +8.930%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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