Image Source: Fox News
Palantir co-founder Joe Lonsdale has warned that the crypto crash could get worse in the future, saying that “most” cryptocurrency companies will fall to zero.
In an interview with Fox News, Lonsdale said that more crypto companies are going to fail as many crypto tokens are Ponzi schemes. However, the venture capitalist, co-founder of software company Palantir, said that blockchain technology will continue to be an important part of the future.
"In general, I think most things will fall apart," he said. Various crypto lenders, crypto tokens, and other parts of the ecosystem were “a Ponzi scheme, and it made no sense. It's what I would expect in any situation where you have things that aren't regulated."
Lonsdale claimed that crypto initiatives have been “evaluated not on the basis of cash flow or value creation in the economy, but on the basis of what people would pay for it” over the past two years.
The recent comments come amid the collapse of FTX, once the world's third-largest cryptocurrency exchange, which announced it had filed for Chapter 11 bankruptcy in Delaware early last month.
Following the fall of FTX, cryptocurrency lending and lending platform BlockFi, previously one of the largest in the cryptocurrency space, has also filed for Chapter 1 bankruptcy protection. The company has indicated that it expects to restructure and will continue operating for the moment being.
Lonsdale claimed that some companies that went bankrupt "have had a lot of corruption," especially when it comes to FTX. In fact, many experts have compared the sudden crash of the FTX cryptocurrency exchange to the scandal of energy trader Enron or Lehman.
"In the long run, there's a fair bit of crypto, but most of what we've seen in crypto in the last three, four, or five years was a speculative bubble fueled by cheap money and fueled by a lot of these Ponzi schemes. », he added. .
Nonetheless, cryptocurrency-based technologies will continue to be adopted despite the recent cryptocurrency turmoil, Lonsdale said, adding that the blockchain technology used in cryptocurrencies allows funds to be transferred online without using traditional banking or government infrastructure. , allowing for a new and important shape. to move. money globally.
“It makes sense to have more decentralized power and have something like Bitcoin exist,” he said. “He has helped people get money out of Russia, Venezuela, China. It gives the financial system more freedom from governments that are doing really bad things."
However, not everyone is so optimistic. As noted, economist Paul Krugman claimed that the entire crypto market has entered an “endless winter” and will never recover again.