The period known as “crypto winter”, referring to the downturn in the cryptocurrency industry, is only going to intensify and get worse, according to Kathleen Breitman, co-founder of blockchain platform Tezos.
Part of this is because there was a lot of easy money going into the system and Breitman suggested that numbers had been artificially stoked.
Speaking to CNBC’s Karen Tso on Wednesday, Breitman said that there were already sufficient numbers to take a look at and see how things have not been going well, and why they won’t necessarily improve in the immediate future.
Breitman gave an example with OpenSea, an NFT marketplace, which saw its daily volumes go from $2.9bn down to $349m as of September 2022.
Breitman added: “Clearly there is a phenomenon that has kind of crested and gone away in a lot of these markets, but meanwhile they’re saddled with a $13 billion valuation.”
The executive explained that because of the money that was invested in the sector, valuations were pushed up very quickly to the top, prompting people to seek even more ways to make these valuations justifiable in some way.
However, not all is bleak in the future. If anything, this crypto winter will teach investors and consumers how to approach the industry more responsibly while also ditching the “cheap tactics”.
This shift will also mean a stop to the “easy come, easy go” sort of investment mentality which is often associated with the rapid swings in the value of given cryptocurrencies.
Breitman also had a very simple way to gauge whether some parts of the industry would succeed in the future – if something is useful, it would most likely thrive.
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