Yes, the crypto winter seems never-ending, and, yes, the industry has been marred by the FTX debacle and the arrest of Sam Bankman-Fried.
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Despite this gloom and doom, though, numerous experts still strongly believe in crypto and its value and won’t be deterred by naysayers’ opinions.
Mark Cuban, a billionaire entrepreneur and owner of the NBA’s Dallas Mavericks, said he is still bullish on the space and has invested in crypto, despite the collapse of FTX, mostly because he believes in smart contracts.
“The value of a token is derived from the applications that run on its platform and the utility they create,” he tweeted Nov. 13.
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According to a new Bakkt survey, consumers seem to be shrugging off the 2022 market volatility and the FTX collapse: Before the FTX failure, 89% of crypto owners said they were likely to purchase crypto in the future, but the sentiment declined by just 7% after the FTX events. Meanwhile, crypto curious sentiments held steady, the survey found.
“Cryptocurrency — and Bitcoin specifically — has already shown it offers real value and has staying power,” said Dan O’Prey, chief product officer of Bitcoin and crypto at Bakkt. “I believe Bitcoin is unique from crypto, as it is a truly decentralized leaderless digital cash and its utility is only poised to grow from here both in adoption and application.”
O’Prey added that while we are in a down market it is this type of volatility that has exposed some of the unsustainable and nefarious practices.
“It isn’t the first downturn and it won’t be the last, but everything that has happened recently is helping to rid the market of bad actors,” he said, adding that what happened with FTX was an institutional failure due to fraud, not a failure of cryptocurrency technology.
He added, “The players that will last for the long haul will be open to transparency about their practices and welcome thoughtful regulation.”
Others supporting the space include Tim Draper, venture capitalist and founder of Draper Associates who said in November that Bitcoin would top $250,000 in June 2023.
Just like several other crypto supporters, he noted that one of Bitcoin’s core strengths is that it’s decentralized.
“FTX was centralized around one person,” Draper tweeted on Dec. 3. “Decentralized currency is the great opportunity we have for economic evolution. Governments need to design software to tax businesses operating in a Bitcoin-walled garden so they have more trust in Bitcoin.”
The consensus among Bitcoin maximalists and crypto believers seems to be that FTX was not a “crypto event” and that, despite the massive pain it has inflicted on thousands of customers, one positive outcome is that it’s weeding out bad actors and is helping the industry return to the basics of what crypto and blockchain truly are.
“Saying you are not bullish on crypto because of FTX is like saying you are not bullish on stocks because of Bernie Madoff,” said Ric Edelman, a former financial advisor and founder of the Digital Assets Council of Financial Professionals. “FTX has nothing to do with blockchain or digital assets, any more than Madoff had anything to do with the stock market. Madoff was just another con artist who led a massive fraud. And it certainly appears that Sam Bankman-Fried is also a con artist who led a massive fraud. Madoff used the stock market to perpetrate his con; SBF used crypto.”
Edelman emphasized that the underlying benefits of blockchain and digital assets are unaffected by FTX and SBF, as blockchain technology allows businesses to operate faster, safer and cheaper, with greater transparency and inclusion.
“Which is why 90% of all banks worldwide are developing the technology, with more than 70,000 software engineers engaged,” he said. “More than $35 billion has been invested in this technology in the past two years alone; PwC says it will add nearly $2 trillion to the global economy by 2030, and McKinsey says 70% of global GDP will be digital by 2030. BIS says every government will deploy CBDCs by then — China and The Bahamas already have — and there is broad bipartisan support in almost every country.”
In the aftermath of FTX, Edelman said, several positive developments happened in the space. To name a couple: Warner Music announced that fans can buy and listen to music NFTs through the Polygon blockchain, and Goldman Sachs announced it plans to spend “tens of millions of dollars” to buy or invest in crypto companies.
Indeed, in a Wall Street Journal op-ed on Dec. 6, Goldman Sachs CEO David Solomon wrote: “The swift collapse [of FTX] raised doubts about cryptocurrencies and blockchain technology, the software behind crypto assets.”
But, he added, unlike other waves of innovation, blockchain technology came in and disrupted heavily regulated industries.
“The invention of email didn’t make FedEx or UPS obsolete. But blockchain technologies such as peer-to-peer payments and the tokenization of traditional assets are changing corporations, from how they raise money to how investors trade stocks. This has far-reaching implications for the global economy.”
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This article originally appeared on GOBankingRates.com: Why Mark Cuban and Others Still Believe in Crypto
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