The current “Crypto Winter” will “only get worse,” according to the co-founder of the open-source blockchain platform Tezos, as the sector is reevaluated in the context of higher interest rates.
In an interview with CNBC while attending a tech conference in Lisbon, Portugal, Tezo’s Kathleen Breitman claimed that the recent difficulties facing the cryptocurrency sector are due to a market correction of overvalued firms.
According to Breitman, “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 used the NFT marketplace OpenSea as an illustration; according to data from Dune Analytics, the platform’s trading volume has decreased 94% since reaching an all-time high of US$4.86 billion in January 2022.
However, they are still valued at US$13 billion, according to Breitman. “Clearly, there is a phenomenon that has kind of crested and gone away in a lot of these markets” he said.
Breitman asserts that now that the “easy money” has dried up, businesses with organic communities that find solutions to real-world issues will succeed while those without true user growth would 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.