Reddit founder Alexis Ohanian has remarked in an interview with CNBC that he believes that a crash in the cryptocurrency market as seen over the past few days is needed in order for the market to stabilize and mature over time.
The Reddit entrepreneur feels that focus on software development and infrastructure within the cryptocurrency industry are important factors in building a stable future. He also suggested that the falls in cryptocurrency prices would have the effect of sifting out the undesirables in the industry from the genuine contributors, and those in for making quick money.
The Reddit founder feels that innovations being created now will have longevity and although blockchain pitches he has received may be fewer in number, Ohanian claims that they have more potential than those he was receiving in 2017.
Over the last few days, Bitcoin has suffered its biggest losses in over eight months. Although, after falling to USD 5,202 on 15 November, after a little price correction, trading picked up today at $5552.17 (time of writing). The newly hard forked BCH has fallen by 15% and is trading at $387.41. Brian Kelly, the founder, and chief executive officer of BKCM, has blamed the hard fork for the crypto market crash. Mati Greenspan from eToro says he saw it coming:
“The movement we saw today seemed to be the run-of-the-mill volatility surrounding Bitcoin and a breakout that’s been weeks coming….It’s difficult to say where it ends. No one can really predict.”
Forbes contributor Clem Chambers noted a correlation to the spike in the bond market:
“The obvious culprit causing this dump is Bitcoin Cash, the ‘wannabe’ Bitcoin usurper, which forked from Bitcoin last year. It is forking again and there are competing forks and all sorts of conniptions are expected. It sounds plausible this is causing the move but the fact the bond market spiked at the same time suggests something else is going on to me.”
Stephen Innes who heads up trading at Asia Pacific of Oanda Corporation suggested that the crash was an even worse scenario than he had anticipated and that pre-BCH online chat had the effect of creating doubt and uncertainty among investors.
Ohanian sticks with his view that the crash is necessary, arguing that during hard times people start to focus on the essentials.
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