Crypto: Toward a Market “On a Much Sounder Footing” After Months of Heavy Turbulence?
In 2018, it’s a little harder to see what factor caused the decline, because DeFi wasn’t as big as it is today and there weren’t any problems with stablecoins. I think there was a media hype around bitcoin that was overhyped. In the house of bitcoin [l’ancien nom de Coinhouse, NDLR], I remember we had up to 400 people queuing up to come and buy cryptocurrencies. It was very little oriented and there were people who could wait two hours to go and buy ripple and other cryptocurrencies that were more exotic and much less interesting than bitcoin and ethereum.
At the time, retail pretended to understand cryptocurrencies and bet on them in casino mode, when it was absolutely wrong to think that way. The sector saw it as a source of interest without really understanding what it was all about, and people came and said they wanted to buy a few cryptocurrencies, as if they were working on their market on a Saturday morning in Saint-Paul-de-Vence to bought zucchini. Frankly, he lacked intelligence and education.
It’s not the same right now. This time, innovation caused the decline. The excess of innovation, the excess of confidence, especially in DeFi, in certain forms of technology, the youth of certain people who are running projects, especially around the Luna Foundation and other protocols, has sharpened the appetite of very intelligent, but particularly Machiavellian people in this industry or the industry of traditional finance, who are believed that money could be made.
What happened on Luna is not a Ponzi scheme or a tech crash at all, it is a real attack by Soros, which consists, as with the attack on sterling, to exploit an unbalanced protocol and bear market with bitcoin falling, borrow a lot of money and thus sell a large amount of Luna to disrupt the protocol.
The attack was masterfully executed, and the protocol, which was unbalanced, was unable to resist. I think we have experienced a phenomenon very close to Lehman Brothers in the world of cryptocurrencies. A chain reaction took place behind. We saw it in 2008 with the phenomenon subprime unfortunately on a much more dramatic scale. But in crypto finance, which is less developed than global finance, the phenomenon is contained.
The impact was very violent, because it is still a very young sector. If one of the stable coins had been shaken, the phenomenon would have been much more massive. But in this case, the industry is strong and healthy enough to solve its problems. We finally cleared the area of people who were also far away greedy [avide en anglais, NDLR].
It should also be remembered that people who are interested in cryptocurrencies are not just geeks driven by the spirit of innovation. There are also speculators who somewhat forget the rules. When the Celsius [plateforme qui s’est déclarée en faillite à la mi-juillet, NDLR] offers insane returns compared to other players in the sector, no one wonders how this is possible. It is very good to clean up the market a bit, push people away greedy who lack knowledge and want to break free from the rules. Now we will be able to work on a much healthier basis.
