Crypto companies state countless digital currencies will collapse

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Crypto firms say thousands of digital currencies will collapse

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With more than 19,000 virtual currencies out there, the cryptocurrency market has actually compared the present state of the marketplace to the early years of the web. Industry gamers stated nevertheless that the majority of these coins will collapse.

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Several cryptocurrency market gamers have actually informed CNBC that countless digital tokens are most likely to collapse while the variety of blockchains out there will likewise tip over the coming years.

There are more than 19,000 cryptocurrencies out there and lots of blockchain platforms that exist. A blockchain platform, such as Ethereum, is the underlying innovation that a number of these various cryptocurrencies are built on.

The current collapse of so-called algorithmic stablecoin terraUSD and its associated digital token luna, which sent out shockwaves through the marketplace, has actually thrust a spotlight on the countless cryptocurrencies out there and whether they will all make it through.

“One of the effects of what we’ve seen last week with the Terra issue is we’re at the stage where basically there are far too many blockchains out there, too many tokens. And that’s confusing users. And that’s also bringing some risks for the users,” Bertrand Perez, CEO of the Web3 Foundation, informed CNBC at the World Economic Forum in Davos, Switzerland, recently.

“Like at the beginning of the internet, you were having lots of dotcom companies and lots of them were scams, and were not bringing any value and all that got cleared. And now we have very useful and legit companies.”

Brad Garlinghouse, CEO of cross-border blockchain payments business Ripple, stated there is most likely to be “scores” of cryptocurrencies that stay in the future.

“I think there’s a question about whether or not we need 19,000 new currencies today. In the fiat world, there’s maybe 180 currencies,” Garlinghouse stated.

Guggenheim Chief Investment Officer Scott Minerd included additional pessimism recently when he stated that many crypto is “junk” however that bitcoin and ethereum would make it through.

The remarks from the market come as the cryptocurrency market continues to feel pressure. Bitcoin is off more than 50% from its record high it struck in November, with numerous other digital tokens dramatically lower from their all-time highs.

Many various blockchain platforms from Ethereum to Solana are competing for a management position in the market. But Brett Harrison, CEO of cryptocurrency exchange FTX U.S., stated the hundreds presently out there will not all make it through.

“When you think about the blockchains … there probably won’t be hundreds of different blockchains in 10 years, I think there’ll be a couple of clear winners for different kinds of applications,” Harrison stated.

“And we’ll see the market … sort that out over time,” he included.

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