The crash of TerraUSD will not be the last of stablecoin and cryptocurrency crashes, Blockchain.com CEO Peter Smith has cautioned.
He expects the market to go through more tribulations down the road. According to Smith, the crash of stablecoins and mainstream cryptocurrencies is to be expected, but “more pain” is coming.
He said that some of the recent events should educate investors on how to treat the crypto market not as an opportunity to get rich overnight, but as a way to develop one’s portfolio gradually.
Smith argued that the crashes should make it abundantly clear that cryptocurrency investments should be treated similar to US dollar investment. Building a diverse portfolio that is not exposed to a single bout of volatility is key, the executive noted.
“Average into it slowly”, Smith said during an appearance at the CNBC’s Worldwide Exchange. Bitcoin continues to be in the doldrums with its value at $26,000 and the currency continually losing from its all-time high value.
“What’s going on in the market is a washout of risk and leverage across the entire global market system, and we’ve certainly felt that in crypto very keenly, especially in the past few weeks”, Smith added.
But to Smith there aren’t many actual signs to worry about – he doesn’t see this as an apocalyptic, end-of-crypto-days development. Rather, he argues that the adoption and growth of cryptocurrencies will happen tamely, slowly and will take time.
Companies and investors serving the market will begin consolidating, Smith argued, and he called the recent volatility “creative destruction” that will help the industry in the long term rather than harm it.
It will take a few weeks or even months, the Blockchcain.com chief executive argued, but things will go back to normal.