"Thousands of Existing Cryptocurrencies Will Collapse... Similar to the Early Dotcom Era"

On the morning of the 24th of last month, the Bitcoin price and other market prices were displayed at the Bithumb Customer Center in Seocho-gu, Seoul.
[Image source=Yonhap News]

[Asia Economy Reporter Hwang Sumi] A forecast from the United States predicts that thousands of existing cryptocurrencies will collapse. This pessimism in the market seems to be growing following the crash of the Korean cryptocurrencies TerraUSD (UST) and Luna.

According to CoinMarketCap, a global cryptocurrency market tracking site, Bitcoin recorded $29,781 at 8:22 AM on the 5th, down 0.32% from the previous day. Bitcoin recovered to $30,000 on the 3rd after Nasdaq surged 2.7%, but fell below $30,000 again on the 4th as Nasdaq plunged 2.47% the following day.

Compared to November 11th, when it surpassed $67,000, it has halved in about six months. Moreover, the market capitalization of UST and Luna evaporated by 58 trillion won within a week. Additionally, Solana, the strongest competitor to Ethereum, has been devastated by network outages, marking the cryptocurrency market's coldest winter ever.

To make matters worse, there is also a forecast that thousands of existing cryptocurrencies will disappear.

According to the US economic media CNBC on the 3rd (local time), there are currently more than 19,000 types of cryptocurrencies. Furthermore, there are hundreds of blockchain platforms, which are the underlying technology of cryptocurrencies.

However, the media reported that industry insiders are raising doubts about whether existing cryptocurrencies can survive in the future due to the aftermath of the UST and Luna crash last month.

Industry insiders particularly view the large number of cryptocurrencies and blockchains as a poison. They explained that this not only causes confusion among users but also puts them at risk.

Brad Garlinghouse, CEO of Ripple, predicted that only dozens of cryptocurrencies will survive in the future. He questioned the necessity of over 19,000 new cryptocurrencies and added that there are actually only about 180 fiat currencies.

Bertrand Perez, CEO of the Web3 Foundation, saw the current situation as similar to the early days of the internet. Just as many dot-com companies existed in the past but most created no value, now only useful and legitimate companies remain.

In fact, the cryptocurrency market appears to be facing great difficulties following the collapse of UST and Luna. Especially due to the UST crash, the stablecoin Tether was also shocked as its dollar peg temporarily broke.

Earlier, Scott Minerd, Chief Investment Officer (CIO) of Guggenheim Investments, criticized on the 23rd of last month that Bitcoin could plunge to the $8,000 level and called "most cryptocurrencies garbage."

The Winklevoss twins, major players in the cryptocurrency market, also expressed a pessimistic view, saying that winter is coming to the cryptocurrency market. According to CNBC on the 2nd, the Winklevoss twins announced in a blog post that Gemini, their cryptocurrency exchange, plans to cut 10% of its staff.

Additionally, Coinbase, the largest cryptocurrency exchange in the US, saw its revenue decrease by 27% compared to a year ago due to a decline in trading volume. Accordingly, Coinbase plans to scale back expansion plans this year and indefinitely extend the hiring freeze.