The millionaire investor from the TV show Shark TankKevin O’Leary says “full panic” and “massive volatility” will come in crypto markets before the industry pivots back to stronger companies and clearer regulations.
Despite the recent decline of crypto finance firms like Voyager Digital and Celsius, O’Leary told Cointelegraph on July 13 that there is yet to be a “real big event” seen in previous market cycles before returning to a growth spurt in the space, stating:
“This game of passion is repeated over and over again.”
Some investors have pointed out that current market conditions are the result of overly leveraged, centralized finance companies, like Voyager and Celsius. O’Leary said that the problems of these types of companies come from “idiotic managers” who must be eliminated to make the sector more viable.
“It is unfortunate that these companies have gone to zero, but much stronger species are ended.”
Ben Samaroo, CEO from crypto investment support firm WonderFi Technologies, which was also present during the interview with Cointelegraph, said that the recent bankruptcies are part of the “second wave of crypto crisis” in Canadian history.
Samaroo explained that the first “cryptocurrency crisis” in Canada was characterized by the fall of the now-defunct cryptocurrency exchange QuadrigaCX in 2019, which saw $145 million in user funds disappear following the sudden death of its founder, Gerry Cotten.
WonderFi’s CEO believes that this second wave of crisis will cause regulators to focus on crypto-earning products like Voyager Digital.
“Canadian regulators are looking at anyone offering profit products in Canada to find out what it means. They are looking through the rubble of the collapse to apply restrictions.”
The duo suggested that stablecoin regulation will be another major hurdle the sector will face. O’Leary stated unequivocally that “we need more stablecoins, as many as there are basic products”, but they must maintain their parity.
Although he said that what happened with the crash of the Terra ecosystem in May with the decoupling of Terra USD (UST) was “good”, others cannot follow the same path if they wish to exist. He added that Tether (USDT) may experience further problems after its peg faltered and fell to $0.95 in May.
“Tether parity breaking is going to be a big deal for regulators when they study which stablecoins are acceptable for platforms to use.”
For now, USD Coin (USDC) is the preferred stablecoin on Bitbuy and Coinberry. However, Samaroo noted that exchanges could list other stablecoins as long as it does not subject users to a “catastrophic event of a stablecoin that is not quite stable.”
However, O’Leary and Samaroo seem to have their sights set on the long-term growth of the sector, as WonderFi just went public on the Toronto Stock Exchange on June 20 and has completed the acquisition of the Canadian exchange Coinberry, worth USD 38.4 million, July 4. She now owns Bitbuy and Coinberry in Canada.
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