Crypto Winter will last until 2023, says PayPal alum David Marcus

[ad_1]

David Marcus may run a Bitcoin-focused business, but he doesn’t see Crypto Winter ending any time soon.

Marcus was CEO of PayPal and also led crypto efforts at Facebook (now Meta). He currently runs Lightspark, a Los Angeles startup building payment infrastructure leveraging the capabilities of Bitcoins.

In a Friday blog post on Medium, Marcus predicted, among other things, how the crypto sector will fare in 2023. Crypto speculators hoping for a turnaround next year will be disappointed by his outlook.

Crypto ugliness exposed

First, Marcus looked back to 2022, noting the bankruptcy of FTX. The $32 billion cryptocurrency exchange had established itself as a leader in the field, having enlisted star athletes like Tom Brady and other celebrities to boost its image. Its collapse last month shook confidence in the crypto sector and sparked calls for tougher regulation.

FTX founder Sam Bankman-Fried has been charged by US authorities with eight criminal offenses ranging from wire fraud to money laundering to conspiracy to commit fraud and is expected to serve a lengthy prison sentence .

For crypto, it was an even tougher year, Marcus wrote. We saw all the ugliness of the early years of Wall Street greed repeated with the rapid house-of-cards style collapse of many companies, the most egregious and shocking being FTX capping off the year with a dose of added drama. and very unnecessary.

FTX’s collapse added to an already miserable Crypto Winter. Year-to-date, Bitcoin and Ethereum, the two major cryptocurrencies, are down more than 60%, and shares of crypto exchange Coinbase are down around 85%.

Crypto recovery will take years

But Marcus sees little relief coming.

We won’t come out of this crypto winter in 2023, and probably not in 2024 either, he wrote. It will take a few years for the market to recover from the abuses of unscrupulous players and for responsible regulation to take hold.

Coinbase CEO Brian Armstrong also noted bad industry players earlier this month, telling attendees at a crypto founders’ summit: We have to kind of accept as an industry does this. that, I think our industry attracts a disproportionate share of fraudsters and scammers.

When it comes to crypto regulation, Senator Sherrod Brown, chairman of the Senate Banking Committee, said a few weeks ago that crypto isn’t getting a free pass because its shiny, shiny things that look like and behave as securities, commodities or banking products should be regulated and supervised by responsible bodies that serve consumers.

Marcus noted that consumer confidence will take a few years to recover, but ultimately I think it will prove to be a beneficial reset for legitimate industry players in the long run.

He added, In crypto, years of greed will make room for real-world applications. The years of creating a token from scratch and making millions are over. The music stopped. We returned to our regular programming of creating real value and solving real-world problems.

Our new weekly newsletter Impact Report examines how ESG news and trends are shaping the roles and responsibilities of today’s leaders. Subscribe here.

[ad_2]