Tension in the crypto asset market: Thousands will collapse

Several cryptocurrency market players told CNBC that thousands of tokens will crash and the number of available blockchains will also decrease in the coming years. There are currently more than 19,000 cryptocurrencies and dozens of blockchain platforms.

A blockchain platform like Ethereum is the underlying technology on which many different digital currencies can be built.

The collapse of algorithm-based stablecoin TerraUSD and its associated digital token Luna in May drew attention to the question of whether thousands of existing cryptocurrencies will survive.

Bertrand Perez, CEO of Web3 Foundation, told CNBC last week at the World Economic Forum in Davos, Switzerland: “We are in a phase where there are too many blockchains and too many tokens like us last seen at the Terra issue this week. .

This confuses users and introduces some risks to users. In the early days of the Internet, there were also many “.com” companies. Most of these were scams and brought no value. All of these companies were taken off the market. Now we have very useful and legal businesses.”

Brad Garlinghouse, CEO of blockchain company Ripple, said cryptocurrencies could have “points” in the future.

Galinghouse “I think there is a question mark today as to whether we need 19,000 new currencies. “There are maybe 180 currencies in the world of fiat money right now,” he said.

Scott Minerd, Guggenheim’s Chief Investment Officer, said last week that most cryptocurrencies are “junk,” but Bitcoin and Ethereum will survive.

While many different blockchain platforms from Ethereum to Solana are vying for industry leadership, Brett Harrison, CEO of cryptocurrency exchange FTX USA, stated that the hundreds of digital currencies currently in existence will not survive.

Bitcoin is down more than 50 percent from its record high in November, and many other digital tokens have fallen sharply from their all-time highs.