CEO from blockchain.com about crypto winter: We are now in despair
CEO from blockchain.com about crypto winter: We are now in despair
- crypto has been in a bear market for nine months, says Smith, and we are now undoubtedly in the crypto winter
- blockchain.com was an early Terra investor, but sold his luna stack in front of the crash
cryptocurrencies have fallen by 45 % since the beginning of the year - for the first time in three years directly in the bear market area.
As with the previous downturn of crypto in 2018 and 2019, the layoffs begin to beat.
KRYPTO exchanges employees were the first on the Hackklotz-companies such as Bitmex and Gemini have promised to dismantle personnel since April, while Coinbase is planning to withdraw accepted job offers to reduce costs.
without naming Certain companies, Blockchain.com CEO Peter Smith at Amsterdam Geld20/20 Conference this week said that many crypto companies have grown too quickly, without concentration, profitable to focus on become.
"We are the smallest crypto company of its kind-others have thousands of employees before profitability," said Smith and found that several companies have spent up to $ 800 million for marketing costs in this cycle.
Smith added: "A lot of it has to be washed out of the room, not only in crypto technology, but in fintech in general. We will experience a fundamental rotation of growth to free cash flow."
Smith said that investors had blocked, which was founded in 2011, pushed more to output for marketing and grow faster during the previous mania. Bitcoin dramatically rose from $ 9,000 to almost $ 62,000 between the second half of 2020 and November 2021, which triggered explosive growth in the entire crypto sector.
"Every company that followed this strategy had a dramatic upswing in his business - large growth rounds collapse, companies are now increasing at low prices - it will be difficult for them to adapt," said Smith. Earlier this week, Crypto loan Blockfi aimed to obtain a value of $ 1 billion, compared to $ 3 billion in his previous round in March 2021.
The three epochs of the crypto bear markets
However, it is up to the debate whether a bear market is equivalent to the dreaded "crypto winter". At least the previous Baisse took significantly longer than nine months, and the depths of the crypto winter dropped Bitcoin 90 % below its highest level of 2017.According to Smith's assessment, the current bear market has been ongoing for nine months - which leads to further possible pain on the horizon when past patterns are repeated.
Smith outlined in an interview with Blockworks, which he calls the three epochs of the bear markers: the beginning that is difficult to feel; the middle where the despair sets; And the new normality.
"We enter the second era [Despair], that's my favorite," said Smith. "I am a capitalist of the free market and enjoy the cleaning power of the market."
Otherwise known, he said when the chapter leaves where the flood goes out and we all see who carries pants, Echo Warren Buffett from a winning call from Berkshire Hathaway from 2001. Ironically, Buffett is a vehement
This phase is also defined by the ability to differentiate high -quality projects for the benefit of customers, teams and shareholders. "In the last phase everyone looks around and say: 'Oh, that's crypto now, and we will all find out how we can get it up.
blockchain.com never listed the failed stable coin UST from Terraform Labs, even though the Luna platform offered. Smith resisted VAT and described the decision to avoid stablecoin as a "no popular choice". There was a certain internal pressure to offer it so that users could unlock up to 20 % APY on the Anchor credit platform. "Consumers love 20 %, but consumers also hate zero," said Smith, referring to the collapse of Luna and VAT. blockchain.com, however, was an early investor in Luna, long before VAT. Smith said he had doubts about the sustainability of the Terra ecosystem and finally got out of the position before crashing. "Everything that goes up too quickly, worries me," said Smith. "Solana also rose too quickly." Solana is currently changing the owner for $ 41 - 85 % under his record high of $ 260 Smith also doubted algorithmic stable coins, even though he had invested in some. He said it would be "very cool" if someone worked, but tends to believe that he will not do it by default and would like to prove to be wrong. Nevertheless, the crypto veteran mocked the idea of taking Justin Sun's new algorithmic stablecoin decentralized US dollar (USDD) seriously. The circulating USDD offer has gone up from zero to over $ 700 million since the beginning of May. . . The article Blockchain.com CEO on Crypto Winter: We’re Now Entering 'Despair' is not a financial advice. blockchain.com left his luna position before the crash