When the Los Angeles Rams defeated the Cincinnati Bengals in the National Football League championship game last February, a series of unexpected players sparked controversy outside the stadium, in the auditorium across the United States.
On one of the largest nights on American television, which attracted 99 million viewers, the Super Bowl broadcast was interspersed with a series of commercials. Social media is full of talk about how digital labels came to be when they captured the extreme era that they were controlled by big giants like Coca-Cola and General Motors.
One of the announcements that evening was comedian Larry David, who plays Ludet, denying humanity's greatest creativity – from steering to Edison lights and, as he suggested, the commercial cryptocurrency exchange vtxVTX. He said the scene was "a safe and easy way to access encryption", as David's character says, "I don't think so – and I don't make any mistakes in something like that.”
This ad is not too old.
With the collapse of several major crypto companies in recent months, sectors that have promised alternatives to traditional global financial models are facing ongoing questions. In May last year, the listed coins and Luna crashed, losing almost all of their value overnight and destroying 4 45 billion from the crypto market in one day. Singapore crypto-hedge funds abruptly shut down three shares of the capital. Crypto lenders voyager digital and percentage network, both of which lent money to three Ventures, filed for bankruptcy soon after.
And in November, FTX was a popular platform for trading cryptocurrencies with Super Bowl-radius ads. Its founder, Sam Bankman Fried, was arrested in the Bahamas in December and charged with fraud. The price of bitcoin, the world's most popular cryptocurrency, was a third at its peak in October 2021.
The FTTx ad ends with David with the slogan " Don't be like Larry."Now, many of the approximately 420 million people who have invested in cryptocurrencies may want to be like Larry.
Is cryptography at the top of the list?
Short answer: as a subject, cryptocurrencies are more likely to survive, experts told Al Jazeera. However, the sector may face increasing regulatory and long-term uncertainty. Many companies and businesses will die. To survive, the company will first face a task: to restore customer confidence.
Ice Age
The Cryptocurrency trading platform attracts customers with promises of quick return on investment. Tip: save money in so-called crypto wallets, which are thought to work the same way as a savings bank account, and get high-interest rates, sometimes doubling. For those who do not trust traditional finance, the ability to make transactions without worrying about the regulatory authority as an intermediary attracts additional attention.
But this attraction has declined as the U.S. Federal Reserve and other major central banks around the world have increased interest rates by 2022, making traditional investment options more profitable than ever before. For example, in 2022, the U.S. rate has increased by more than 4 per cent.
Once the Tribunal and the moon fell freely, the combination of safer options and lower confidence in cryptography became a crisis that, according to experts, was still unfinished.
"I think we'll see a lot of bad news before the stage starts," Tim Leung, director of the risk and Finance Management Program at Washington University in Seattle, told Al Jazeera.
Leung said that at the moment many potential customers are hesitant, and the crypto platform may experience low sales volumes for a short period. The cryptocurrency sector is proud of its independence but relies on funding from traditional markets. According to Leung, it is unclear how long this funding will last in the current situation. He warned that with low mobility and low funding many small businesses could grow.
According to Leung, cryptocurrency companies that produce virtual currencies – or coins – using energy-consuming supercomputers will also suffer. The decrease in demand for coins due to low trade volume and rising energy costs will force the capabilities of their business model. "I think this process will last until 2023," he said. "It's probably a crypto-glacial period, not crypto-winter.”
Experts have suggested that there is nothing surprising nothing is surprising about the reduction.
"This is an emerging industry with hundreds of companies and a lot of innovations," said David Erak, a professor of finance at NYU's Stern School of Business. He told Al Jazeera that he expects a period of turmoil for cryptocurrencies in the future, but believes that "best practices will eventually emerge as a result of competition."
Governments around the world have announced plans to intervene to protect consumers from this chaos. But the regulators and analysts seem to be divided on how best to intervene.
The old law for new technology?
Gary Gensler, chairman of the US Securities and Exchange Commission (Sec), confirmed in September that the current law is sufficient for the crypto sector. He argued that most cryptocurrencies are similar to traditional financial assets that can be traded for securities such as stocks or bonds.
Hilary Allen, professor of law at American University in Washington, D.C., accepts this position. He argued that cryptocurrencies and commercial sectors must meet the management standards required by the sec from legacy securities, including registration with the regulator and display of transparency on the property, or be closed.
He said creating a new standard for the crypto industry was a mistake. "This will justify the idea that cryptocurrency is unique in some ways, and it is unlikely to meet the same standards as large financial assets," Allen said in an interview with Al Jazeera. "This is a dangerous message.”
But many other scholars disagree.
"There's a big difference between Securities and money," said Bruno Pace, a professor of finance at Hec Paris Business School. He said that people invest in savings or bonds based on the flow of money or assets of the company they offer them. They buy money - either dollars, euros or crypto signs-confident that this money or money will be accepted by others in the future.
Christian Catalini, founder of the crypto lab at the Massachusetts Institute of Technology, said that attempts to adapt to the current cryptocurrencies-controlled system will fail without adapting them to new technologies.
Catalini told al Jazeera that he would not guarantee consumer protection. "The worse is that it could kill the potential of updating the site without significant public interest," he said.
Most analysts agree that the scope principle should be focused, especially on one type of cryptocurrency: so-called coins.
Ensuring the accuracy of stablecoins
Unlike tokens such as bitcoin, where prices can vary greatly, the value of stablecoins is attached to conventional currencies such as the US dollar or other traditional assets such as gold. For example, each tether, the world's most popular stablecoin, often sold more expensive than bitcoin, costs $1. The validity of the value puts these stablecoins as a token, although they still carry good profits through their crypto handbags, they are considered safer than other crypto currenciescryptocurrenciescurrencies cryptocurrencies.
"The term 'stablecoin' creates a picture of trust funds that give consumers a false sense of security," Baez told Al Jazeera. "What's the problem? Unlike conventional currency and banking, stablecoins are not regulated by regulation.”
Therefore, theoretically, those with stablecoins worth $100 should be able to redeem this amount whenever they want – as with banknotes-there is no guarantee that they will actually get this amount, PIAS said.
In June last year, Japan passed legislation that only banks and other self-governing institutions could offer stablecoins. The British government proposed that the Financial Supervisory Authority, the country's largest financial services regulator, oversee the company.
Meanwhile, the Indian Ministry of Finance has stated that cryptocurrency regulations will be a priority for the G20 presidency by 2023. Leung of the University of Washington argued that a global framework for crypto regulation is essential, as many companies in this field have influence over different geographic regions.
But for all this to help revitalize the industry, crypto companies need to restore customer confidence First, experts say.
A matter of trust
According to BEIS of Heck Paris, many cryptocurrency enthusiasts may watch big scams like those with FTX play. If they found justice, and if those who lost money for such scams were reimbursed, it would help restore trust, he said.
Some scholars, such as Allen from American universities, believe that cryptocurrencies have little to offer to the financial world in the future. "When you get rid of the speech, there's nothing you can't do with traditional funding tools," he said.
Others are still convinced that cryptography, with its ability to provide financial transactions with peers, is technologically changing. "Technology is not going anywhere, even though the number of initial projects in the field of cryptography has decreased," Catalini said of the Massachusetts Institute of technology.
He claims to be reminiscent of the dot-com bubble that exploded in the late 1990s when the original internet company went bankrupt. Like Amazon, who survived or appeared later, these are among the "Giants on the Internet today, " he said.
However, until the dust and reliability rules were relaxed, Leung of the University of Washington said it was good to be careful. "You don't want to make decisions based on Super Bowl ads," he said. "This is not a game.”