Indeed, the opening session bore the no-nonsense title “Global Macro Uncertainty: The Crypto Narrative.” Yet attendees at the event, which drew thousands of people, weren’t showing obvious signs of concern amid the prevailing gloom.

TOKEN2049, the mainstay event of this year’s Asia Crypto Week in the Southeast Asian city state, stood out for its forward-looking, upbeat approach, with sessions on its first day covering issues including why the slump in cryptocurrency valuations isn’t as bad as it looks, the rise of stablecoins, how the cryptocurrency industry can drive mass adoption, and the opportunity presented by the Crypto Winter.

Zaheer Ebtikar, a portfolio manager at digital asset quant firm LedgerPrime, told attendees that risks and returns were being mispriced.

“Whenever you have a perpetual stream of just negative news for the last nine months, it’s really hard to constantly wind up that negative string, right? So it’s like, you had the Russia invasion, you have like the energy crisis, you’re getting really cold during the [European] winter,” he said.

“[But] I think we have a much more forcing case to imagine why cryptocurrency has probably bottomed and why traditional markets may be uncertain … so going into year-end, I’m fairly optimistic. I think positioning should still be cautious, generally speaking, but I think you’re getting to the tail end of this really peak bearishness.”

Darius Sit, a managing partner at cryptocurrency asset trader QCP Capital, echoed that sentiment, saying he remained positive as the year drew to a close, and that he thought next year would offer moderate upside.

Selini Capital Chief Investment Officer Jordi Alexander said: “I think that in the next few months, we’ll see some crazy stuff – crazy headlines like we’ve seen recently with the pound. So [I’m] very cautious longer term. The thing that makes me extremely bullish are things like bitcoin, ETH, for example, where you have a limited supply and you have kind of a generation that is more interested in these assets.”

He added that since cryptocurrency is so liquid, it typically foreshadowed moves in other asset markets, and that he expected cryptocurrency values to return to positive territory before equities.

Other speakers at the conference expressed similar sentiments, with Pantera Capital founder and Chief Executive Dan Morehead saying that blockchain was positioned strongly over the medium to long term.

“I’ve been through three massive bear markets in 10 years, and I’ve got to admit, in the first few days, I was really sweating and I was, like, I don’t know if blockchain is going to work … Maybe something really bad happens,” he said.

“This cycle is totally different – the fundamentals are so strong. There’s 200 million people using blockchain already. The only thing you need to interact with blockchain is a smartphone, and it’s 4 billion people that have one of those, so I think it’s within only like three or four years that we’re going to have a billion people using blockchain.”

Galaxy Investment Partners Chief Executive Mike Novogratz – an investor in Terra and in one of his first public speaking engagements since the collapse of the project – was sanguine, even philosophical, about the declines seen on cryptocurrency markets this year.

“I like to look at the bright side in this past month, really, with the S&P getting crushed [by inflation] … Bitcoin’s only down 5 per cent with the S&P down 10 per cent,” he said.

He added that bitcoin had outperformed a basket of currencies that included the euro, sterling, the Mexican peso and the South Korean won by about 20 per cent, and that as soon as market conditions stabilised, the world’s original cryptocurrency would “take off.”

Speaking about the implosion of Terra and the bankruptcies of several cryptocurrency companies with exposure to it that followed, he said that their centralised models had failed for a variety of reasons, including unethical conduct, irresponsibility and excessive leveraging, and that decentralised finance models had performed well.

“The protocols, for the most part, worked exactly like they were supposed to, and so it’s a real advertisement, ironically, for on-chain,” he said. “It was the centralised companies run really poorly that blew up.”

Speakers at TOKEN2049 were bullish on US dollar-pegged stablecoins, which they said were a key fixture of the cryptocurrency landscape because they permit holders in high-inflation economies to hedge against the erosion of the value of their own currencies.

Will Peets, chief investment officer at digital asset-focused 100 Acres Ventures, said: “Stablecoins … seem kind of boring if you’re in cryptocurrency because we’ve been talking about [them] forever … But the reality is there’s US$150 billion-ish in dollar-backed stablecoins. This is the first time we’re going to go into an era where you can just have a currency crisis and you have access to dollars outside your banking system, which is a huge deal.”

Tron founder Justin Sun said stablecoins were a focus for the San Francisco-headquartered blockchain, which he said hosts more than US$40 billion of them. He added that they functioned as a reliable store of value for their holders in Asia.

“Lots of people basically in the United States probably do not understand that, because in the United States, everyone can get a US dollar bank account,” he said.

In an apparent reference to China, Sun said: “For most of the countries in Asia – you know, you do not even need to mention the name – people have no access to US dollars at all, so, I would say 95 per cent of the population can only hold their own currency. They cannot exchange US dollars.”

Selini Capital’s Alexander told the conference that the pre-eminence of the US dollar, presumably including its domination of the stablecoin space, had prompted pushback from China and Russia, with the former making rapid progress in developing its own central bank digital currency (CBDC) to challenge the greenback’s influence over the global economy.

“It’s going to be easier for them to fight on this new battleground – the digital battleground – rather than the traditional battleground.”

One of the other attributes of stablecoins that speakers identified was their convenience, which Ebtikar said offered scope for increased mass adoption of cryptocurrency.

“Stablecoins are a favourite topic of everyone, just because of how amazing they are truly as an innovation for the world as a whole,” he said. “The ability for me to send US$100,000 without having to do infinite [know-your-customer] is such a blessing. That is an amazing, amazing innovation, and I think it does not get enough love. And that expansion is probably one of the best ways for cryptocurrency to grow.”

The growth and development of the cryptocurrency industry very much formed the overarching agenda of TOKEN2049 as speakers and attendees looked to tap the innovative spirit that has undergirded the cryptocurrency experiment for the past 13 years.

Selini Capital’s Alexander appeared to speak for many of those for whom the bear market had raised difficult questions, saying: “What’s important is the cryptocurrency narrative … What’s really important is not just using this market for building … You have all this stuff that people are building – how about your market’s for philosophy? Let’s come up with what we’re actually using this technology for. Where does it fit in?”