Shark Tank star Kevin O’Leary is taking stock of the altered crypto landscape after billions of dollars were liquidated when two large-cap digital assets collapsed earlier this month.
In a new interview with Stansberry Research, O’Leary says the demise of the TerraUSD (UST) algorithmic stablecoin and its affiliated Terra (LUNA) is a painful part of a growing industry.
“I think this is actually a maturation process for the crypto market. There’s two basic baskets of crypto projects: one, highly speculative tokens, and you could say UST and LUNA certainly fit that because they’ve been re-priced dramatically.
[It’s] highly unlikely in the context of stablecoins they [will] ever return to their old prices because people have figured out a stablecoin should be stable, and that means it has to be backed by something of asset value.”
O’Leary next observes that US Dollar Coin (USDC), which is owned by the financial services company Circle, did not falter like other so-called stablecoins during the recent market crash.
“You can note that USDC did not correct that way. In fact during the period of this mass correction of other algorithmic or other quantitative or speculative stablecoins that really, really got crushed, Circle, the company that issues USDC, was able to raise $200 million from Fidelity and $200 million from Blackrock.
That’s unprecedented in [terms of] equity for the company.
So that’s signaling that that type of stablecoin is favored by institutional investors versus the others which look like they’re a retail product.”
The popular investor also points out that other speculative niches within the world of blockchain have also seen price drops, such as non-fungible tokens (NFTs).
“You’ve got all the speculative stuff, the NFTs have corrected. The Las Vegas side of crypto has had a nightmarish correction, and I think that’s very good in the sense that it helps separate the wheat from the chaff, or the cream from the milk if you wish, whatever analogy you want.
The traditional projects have remained relatively stable. Sure, they’ve had a correction but… that’s the volatility that will be inherent in crypto until there’s policy.”
O’Leary concludes by reaffirming his belief in crypto assets over the long term. He says what remains to be seen is which projects come out on top and which disappear altogether.
“I remain bullish on crypto from the perspective of productivity. I’ve always said this: Bitcoin’s not a coin, it’s software. Ethereum’s software. Solana’s software. Helium’s software. Polygon’s software…
We don’t know which one of these projects is going to win, but the whole premise is that you want these for financial services. I still believe that in 10 years, crypto will be the 12th sector of the economy, but all the existing tokens will not exist.
There’ll be many that just go to zero because they were highly speculative, they were fun, [but] they had no real intrinsic financial services value.”
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Source: https://dailyhodl.com/2022/05/24/shark-tank-investor-kevin-oleary-says-nightmarish-crypto-correction-good-for-industry-heres-why/