The well-known businessman, entrepreneur and cryptocurrency investor Kevin O'Leary believes the cryptocurrency market hasn't hit rock bottom yet. Despite the bear market and what has been dubbed the "cryptocurrency winter", he believes a "panic event" is needed for cryptocurrencies to really bottom out.
Waiting for the "big event"
“What I'm doing right now is waiting, waiting for the big event, as I call it,” he said. And she went on to describe this event: “It will be a day of panic, we will go down by about 2 or 3.000 points. And yes, it's horrible to talk about it, but it's actually very healthy. I believe this is a maturation process for the cryptocurrency market ”.
Some might think cryptocurrencies have hit rock bottom as major currencies like Bitcoin have been in the red for months and hit intraday lows. But O'Leary remains positive. He sees the software behind these coin projects as a new necessity for financial services. And he believes that cryptocurrencies will be the 12th sector of the economy in the future. Regardless of whether many of these coins remain in circulation, O'Leary is convinced that the technology behind them is a high-value payment system that will be adopted in the coming years.
Stable currencies must be backed by real assets
He also commented on the Terra LUNA stablecoin disaster that occurred last month. In general, he has divided cryptocurrency projects into two categories: highly speculative and traditional. He placed UST and LUNA in the first, noting that they were "dramatically repriced," to put it mildly. It is highly unlikely that the stablecoin environment will return to their prices, because people have understood that a stablecoin has to be stable and that means it has to be backed by something of patrimonial value ”. It can be seen that the USDC did not correct in this way, in fact during the period of this mass correction of other algorithmic or quantitative or speculative stablecoins, these were really crushed, ”O'Leary said.
He noted that the USDC-issuing company raised hundreds of millions of dollars from Fidelity and Black Rock, resulting in unprecedented equity capital. In his view, this is the difference between the type of stablecoin (actually stable) and others that appear to be arbitrarily priced retail products. He includes NFTs in this category, noting the correction on this front. He stated, “The Las Vegas part of the cryptocurrency has had a nightmare fix and I think it's very positive in the sense that it helps separate the wheat and chaff or cream from the milk if you like… Because traditional designs have remained relatively stable ". He believes the volatility that is occurring in Bitcoin and Ethereum is natural and will continue until there is a policy on it.