With several cryptocurrency projects collapsing, resulting in a widespread market correction, industry players are warning the situation could worsen in future.
In particular, Joe Lonsdale, the founder of software company Palantir and venture capitalist, has suggested that most cryptocurrency companies will likely collapse in a Ponzi-scheme-style bankruptcy, he said in an interview with Fox News published on December 4.
However, Lonsdale stressed that cryptocurrencies are here to stay while noting most centralized entities will be the most affected.
“Overall, I think you’re going to have most things crash. <…> Various crypto lenders, crypto tokens and other parts of the ecosystem were a Ponzi scheme, and it made no sense whatsoever. This is what you’d expect in any situation where you have stuff that’s not regulated,” he said.
Crypto sector’s sustainability
Indeed, the FTX cryptocurrency exchange collapse has rattled the cryptocurrency market, putting into question the sector’s sustainability. Despite the uncertainty, Lonsdale maintained cryptocurrency technology has more use cases in future, like facilitating cross-border transactions in return for promoting financial liberty.
“It does make sense to have more decentralized power and for something like Bitcoin to exist. <…> It’s helped people get money out of Russia, out of Venezuela, out of China. <…> It allows more kind of liberty for the financial system from really bad-acting…
