Davos Conference Includes Bitcoin FUD

And, Bitcoin Price Pump Continues

Jan 20, 2023

World Economic Forum Meets in Davos, Switzerland

I admit, that’s the only thing I know about Davos. It’s the mountain resort town in the Alps where, each January, a few thousand economists and financial moguls meet to discuss and try to shape the world’s economy. From Wikipedia:

The WEF is mostly known for its annual meeting at the end of January in Davos, a mountain resort in the eastern Alps region of Switzerland. The meeting brings together some 3,000 paying members and selected participants – among whom are investors, business leaders, political leaders, economists, celebrities and journalists – for up to five days to discuss global issues across 500 sessions.

The World Economic Forum was founded in 1971 by German engineer and economist Klaus Schwab, who still attends the meetings at age 84. The organization views its own mission as "improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas.”

WEF Not a Fan of Bitcoin

Yes, even Bitcoin is discussed at these conferences.

For the past several years, some attendees have spoken out against Bitcoin, and 2023 is no different. In 2019, Jeff Schumacher of BCG Digital Ventures boldly stated that Bitcoin “could go to zero.” Bitcoin was going for around $3,500 a coin at the time. Rather than going to zero, Bitcoin now sits at around $21,000.

In 2022, Schwab lashed out at Bitcoin over environmental concerns, without acknowledging any use of renewable energy sources. It’s estimated that 60-63% of Bitcoin mining is now done with renewable sources, much of it with hydro power.

This week, according to Bloomberg, Davos attendees expressed their concerns about Bitcoin adoption and called for “urgent” regulation. This seems to be a reaction to the meltdowns of several crypto exchanges recently, and not an indictment of Bitcoin itself.

Think about it. These are some of the wealthiest people in the world, who have made fortunes in the legacy financial system. The last thing they want is an asset class that could expose the weaknesses of fiat currencies. The printing of fiat currency and the pumping of inflation are good, very good, for the wealthy. It feeds off of the working class, which is less equipped to deal with inflation and generally owns very little in the way of financial assets.

Tweet of the Week, from the incomparable Saifedean Ammous:

Saifedean Ammous @saifedean

The World Economic Forum makes a lot of sense when you see it as just fiat inflation beneficiaries getting together to publicize the memes that are most effective at justifying fiat inflation to easily-impressionable TV and university consumers.

That’s just my two sats about the conference and the spreading of FUD about Bitcoin. (Fears, Uncertainties, Doubts.)

Beautiful place, though.

Bitcoin Price Resurgence Continues

As I penned (keyboarded?) last week’s newsletter, Bitcoin’s price had surged from $16,500 when the New Year’s ball dropped, to around $19,000. A quick 15% pop.

By this Wednesday, the price of a coin had topped $21,400. That means it had appreciated by around 30% since December 31st.

This increase was in spite of more bad news this week from the crypto world. Crypto lender Genesis may be facing bankruptcy, and a small crypto exchange called Bitzlato, based in Hong Kong, was charged by US authorities for money laundering and other bad deeds. (Remember, not all crypto is Bitcoin.) The shakeout of the bad actors in the crypto space actually continues to be good for Bitcoin, making investors aware of the differences between Bitcoin and the “altcoins.”

Bitcoin has a long way to go to regain its all-time high of $69,000. That was at a time of crypto hysteria, and as I stated last week, it was too far, too fast, for the stage of adoption we were in.

Not everyone is glad, however, that the price is pumping. Bitcoin maximalists were hoping to continue buying at under $20,000. They believe in Bitcoin for the long run and view these prices as bargains. Stacking sats at $19,000 is a whole lot easier than stacking at $69,000.

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