More crypto destruction is coming: Blockchain.com CEO

For cryptocurrency investors who have experienced their first crypto panic in recent weeks – witnessing not only the collapse of large bitcoins but also the crash of stablecoins, the collapse of Luna, Terra and the fall of grace from Doe Coon, founder of Terraform Labs – get used to it. To Blockchain.com CEO Peter Smith.

More pain is coming, Smith says, more risks will be exposed, but in the end, it’s a good thing for a decentralized economy.

For crypto investors, he says the lesson of the past few weeks should be to return to crypto, the equivalent of the traditional market investment concept of the dollar-cost average – to gradually build a position in an asset over time so that all your money is not disclosed for any single fight of volatility.

“It’s slowly averaging,” Smith told CNBC’s “Worldwide Exchange.”

Bitcoin reached its lowest level since December 2020, below 2020 26,000 earlier this week, and shares of publicly traded crypto brokerage company Coinbase fell 74% year-over-year this week.

“And you have to be prepared to hold on to it for quite some time,” Smith added. “Because we’re still in a really new time to build this whole economy.”

Blockchain.com, one of the more established players in space, founded in 2011, is number 7 on this year’s CNBC Disruptor 50 list.

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Lately, investors haven’t had the patience, the companies that were covered in crypto, have made huge profits, and many greedy retail investors have held the bag, a classic result in the market bubble.

“What’s happening in the market is that risk and leverage are out of reach across the global market system, and we’ve certainly felt that deep down in crypto, especially in the last few weeks,” Smith said. “I’ve been saying for a long time that it’s going to be a long process of acceptance and growth.”

This process will involve further destruction in the short term as the weak links in the crypto economy are wiped out.

“All you need to look at is market consolidation as well as market service providers,” Smith said.

She Recently tweeted “Creative destruction” strengthens the crypto industry in the long run, and told CNBC, “There are many companies and protocols and resources where our creative destruction process needs to come to market.”

“I hope that in the next few weeks, after this really dramatic pull in the market, some risks will start to emerge through the economy,” Smith said.

This will include companies, trading firms and funds that have not managed their risks properly.

“It will take weeks, if not months, to see a really brutal two or three week effect for crypto,” he added.

Smith remains a cryptocurrency bull, telling CNBC that someone is now witnessing their “fourth or fifth” market cycle in the volatile fintech sector, which “has been brutally tormented every time it enters but has led to a stronger industry, and more useful industry, and beyond.” Real basic growth in two to three years. “

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