Blockchain and crypto industry executives told CNBC that the recent collapse in the cryptocurrency market will help weed out “bad actors” in the space.
Billions of dollars in value have been wiped off the crypto market in the past few weeks due to a sell-off in stocks and demise of stablecoin according to terraUSD algorithm and its related luna token.
Bertrand Perez, CEO of the Web3 Foundation, told CNBC at the World Economic Forum: “We’re in a bear market. in Davos, Switzerland.
“That’s fine, because all those projects are gone. So the legitimate ones will be able to just focus on building development and forget about token pricing because everyone is reduction.”
“During the … bull market when everything is green, no one is thinking about building, everyone is thinking about making money, that is… the wrong mindset,” he added.
Mihailo Bjelic, co-founder of blockchain firm Polygon, echoed this view, calling the crypto sell-off “necessary.”
“[The] The market, in my personal opinion, can become a bit irrational, or it can be a bit reckless to a certain extent. And when such times come, [a] usually need editing and at the end of the day [is] healthy,” said Bjelic.
The sell-off of major digital currencies such as bitcoin and ether was sparked by a broader decline in the stock market, particularly in the technology sector. The drop was made worse by terraUSD stablecoin lost the peg of 1 dollar.
According to Brett Harrison, president of crypto exchange FTX US, large institutional investors have entered the crypto market and were also the main driver of the latest sell-off.
He said that there has been a larger drop in risk assets, such as stocks, but it affects cryptocurrencies more than in the past because there is more institutional money in the space.
“If people were looking for assets to sell, crypto would be on the list,” Harrison told CNBC.
Brad Garlinghouse, CEO of Ripple, urges investors to take a longer-term view.
“Bitcoin was about two years ago right now, bitcoin was about $8,000. Now it’s at 30,000. So there was a crash and a trillion dollars was born. But when you zoom out a little bit more and Looking at the long-term trend, I think you see that crypto is here to stay,” Garlinghouse told CNBC.
