Leaders of various blockchain and crypto organizations believe recent turmoil in the digital assets market could help eliminate bad actors from the nascent industry, CNBC reported on May 27.
Speaking at the World Economic Forum in Davos, Switzerland, Bertrand Perez, the CEO of the Web3 Foundation, said the crypto sector is currently in a bear market, which is good because it will sieve out people who entered the crypto market with bad intentions.
It’s good also, because all those projects are gone. So the legit ones will be able to focus only on developing on building and forget about the valuation of the token because everyone is down.
Perez also noted that people get greedy during bull cycles and only think about making a fortune, which he considers is the wrong mindset.
Echoing these sentiments was Polygon co-founder Mihailo Bjelic, who said the sell-off was necessary. He pointed out that the market had become irrational and a little reckless. To this end, a correction was vital and healthy for the industry.
Ripple CEO Brad Garlinghouse said:
Bitcoin about two years ago right now, bitcoin was about $8,000. Now it’s at 30,000. So yes, there’s been a crash and a trillion dollars came off. But when you zoom out a little bit further and look at the long term trends, I think you see that crypto is here to stay.
Institutional investors are to blame
The recent crypto market crash resulted from a slump in stock markets and the collapse of the TerraUSD (UST) stablecoin and its associated token Terra LUNA.
FTX.US CEO Brett Harrison said institutional investors exacerbated the LUNA situation.
According to Harrison, institutional investors are increasingly embracing the crypto sector. While this indicates the market is maturing, he said institutions always drop risky assets first whenever global markets plummet, and crypto currently tops the list of such investments.
Harrison’s comments are similar to those of Cardano founder Charles Hoskinson who said institutional investors manipulate the crypto market. Per Hoskinson, Wall Street investors treat crypto like any other assets and dump them whenever they underperform.
However, not all institutional investors are driving the bearish trend in crypto. For instance, MicroStrategy has held on to its Bitcoin (BTC) purchases despite the poor market conditions.