Blockchain.com CEO Warns of Incoming Crypto Destruction That Will Lead to a Stronger Industry

Blockchain.com CEO Warns of Incoming Crypto Destruction That Will Lead to a Stronger Industry

Peter Smith, CEO of leading cryptocurrency exchange and wallet provider Blockchain.com, has warned more cryptocurrency destruction is coming in the short-term but believes that in the long run, this type of destruction will lead to a stronger industry.

Cryptocurrency prices have recently experienced heightened volatility after the collapse of the Terra ecosystem, which saw LUNA plunge from a leading cryptoasset to become nearly worthless, and from factors affecting equities markets including inflation and a looming recession.

To Smith, more pain is coming to the cryptocurrency space, but crypto investors should take it as a lesson that it’s important to dollar-cost average into their positions to avoid heightened exposure to sudden bouts of volatility.

Speaking to CNBC, the crypto CEO suggested that investors should be prepared to hold onto their assets for some time as the industry matures. Smith said:

And you need to be prepared to hold it for quite some time. Because we’re still in really the nascent period of building this whole finance system out.

Smith added that the market is enduring a “washout of risk and leverage across the entire global market system” that also affected the cryptocurrency space. Per his words, a “long process of adoption and growth” is still in sight for the crypto industry, however.

In the short-term, however, he sees more destruction ahead as weaker projects in the space fall from grace. Per Smith we need to “see consolidation in the market itself as well as the companies serving the market.” In the long run, he recently suggested, “creative destruction” makes an industry stronger.

The CEO added he expects that in the next few weeks “risks start to be exposed through the economy,” including for companies, trading firms, and funds that haven’t been appropriately managing their risks.




Nevertheless, he remained a cryptocurrency bull saying that he has been in four or five similar market cycles, and noting that “every single time it’s been brutal pain on the way in but led to a stronger industry, and more useful industry, and real fundamental growth over the next two to three years that follow.”

Recently, the co-founder of cryptocurrency trading and venture capital firm Three Arrows Capital, Su Zhu, has revealed he sees some signs that Bitcoin ($BTC) is reentering an accumulation range after the cryptocurrency’s price fell for seven weeks in a row for the first time in its history.

The co-founder of the cryptocurrency hedge fund also added that Bitcoin has been showing strength when compared to equities, at a time in which analysts from Bank of America noted the flagship cryptocurrency has been failing as an inflation hedge over its correlation with equities.

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Featured image via Pixabay


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