Alexis Ohanian, one of the co-founders for Reddit, has come forward with his views on crypto winter. His views are ominous and good for long-term investors and those hoping for genuine growth in the industry. In an interview with Yahoo Finance, the tech entrepreneur explained that the ongoing bear market, which has been dubbed a “crypto winter,” had the positive effect of erasing cryptocurrency speculators.
The cryptocurrency market place is still recovering from the bullish run at the beginning of 2018. During this period almost all coin prices experienced exponential growth–despite the absence of adoption or real-world integration. Instead, top currencies and new coin projects alike were being buoyed by massive investor speculation and this speculative attitude was coupled with the frenzy of Fear of Missing Out behavior. The result was seemingly bloated market prices well beyond any sense of reason, leading analysts and financial advisers to claim that cryptocurrency was caught in the midst of a bubble.
After almost a year, the coin prices reaching as low as 80 percent below their last all-time high, cryptocurrency and its investment base were forced to whether one of the most severe price downturns of any marketplace–a cycle that may continue into the foreseeable future.
However, as per Ohanian, this has been positive for the industry despite the falling of value of cryptocurrencies. Though Ohanian is a well-known cryptocurrency bull, he admits that the market is in a vulnerable position in terms of valuation, but has managed to attract the right-minded developers while purging empty speculation.
“So this is the crypto winter, no doubt. But a friend of mine, Brian Armstrong, who’s the CEO of Coinbase, said this is the spring of crypto innovation. And what he means is, yes, the prices are depressed. The speculators have fled. And that’s great because the people who are now building on crypto are true believers. And they’re actually builders. They’re actually building the infrastructure that it’s going to take to really make this happen.”
He also added that cryptocurrency, the blockchain, and coin projects have been successful in attracting some of the world’s top minds, with the landscape of both technology and financial institutions making a gradual shift in that direction. According to him, the fact that talented developers and finance experts are turning towards cryptocurrency is a positive sign for its future outlook, even if coin prices continue to take a dip in the interim period.
“What’s a strong signal to me is still some of the smartest people I know in tech are working on solving these problems. They’re building companies that are built on the blockchain. The hype is gone. The fervor is gone. But I think that’s a good thing.”
Ohanian said he is comfortable in taking the long-position on the industry, not just in terms of valuation but overall growth and impact. For developers as well as investors who have been in cryptocurrency market for an extended period of time–Ohanian relates being a seed investor in Coinbase back in 2011–the price movements of the last year and a half are merely a distraction in the overall picture of industry growth.
As JP Morgan and tech giant, Facebook has taken an interest in developing coin projects, the shift in cryptocurrency adoption could get hit an exponential pace that might create a more stable and stronger foundation for its valuation.