Sure, Crypto Is Crashing, but Everything Is Perfectly Fine

“If you look at the fundamentals—blockchain adoptions, user expansion, real use cases being unearthed, you wouldn’t think the industry is going anywhere down,” says His Excellency Justin Sun, Grenada’s ambassador to the World Trade Organization, and creator of the TRON blockchain, whose stablecoin usdd also lost its peg to the dollar last week. “The market is full of FUD [fear uncertainty and doubt] right now, the crash of [terra-luna] and the more recent insolvency issues of some DeFi platforms and funds out there are not helping either, but I’m a believer in rational expectations and the market corrects itself. There’s always been cycles, and we are sitting on the slippery slope of the current one.”

Speaking last week, Paolo Ardoino, Tether’s chief technical officer, spotted a silver lining in the crisis, at least where bitcoin is concerned. “Bitcoin might have already proven to be more solid and be less subject to volatility than other coins. Bitcoin went down 60 percent—but the other altcoins went down much farther than that. So bitcoin is showing much more resiliency,” Ardoino says. “We might see a scenario where bitcoin starts to rally in the next months, while the rest of the ‘alt-coins’ remain down.” 

The elephant in the room, however, is the fact that cryptocurrencies—assets routinely touted as a hedge against inflation and the vagaries of the financial system—are behaving exactly like the rest of the stock market. Ardoino himself drew a parallel between bitcoin’s misfortunes and the recent disastrous performance of Netflix stock, which tanked by 40 per cent in a single day in April over disappointing subscriber figures.

Jamie Burke, the CEO of crypto venture fund Outlier Ventures, says that crypto has been behaving exactly like a stock and that they are moving in lockstep because the lines between them have blurred. The vertiginous price highs and the feverish hype around crypto have sucked in a lot of new money…


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