The ongoing Crypto Winter is “only going to get worse” as the industry is re-evaluated amongst tighter interest rates, the cofounder of the open-source blockchain platform Tezos predicts.
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Fast facts
- Speaking to CNBC at a tech industry conference in Lisbon, Portugal, Tezo’s Kathleen Breitman said the crypto industry’s recent woes result from a market correction of overvalued companies.
- “There was a lot of easy money going into the system, and I think it was artificially stoking a number of different things, mainly valuations of these [crypto] companies,” Breitman said.
- Breitman cited NFT marketplace OpenSea as an example, with the platform’s trading volume down 94% since hitting an all-time high of US$4.86 billion in January 2022, according to data from Dune Analytics.
- “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 US$13 billion valuation,” Breitman said.
- Now that the “easy money” has gone away, Breitman says companies with organic communities that solve real-world problems will thrive, while others without authentic user growth will fail.
- “I think what you’ll find is the things that are useful are going to thrive, but that’s the small minority of crypto applications, whether people want to admit it or not,” she added.
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