The cryptocurrency market has been in a bear market since the start of the year, with most coins down by over 65%.
Chainalysis CEO Michael Gronager has revealed in a recent interview that the strength of the crypto market comes from working together.
Chainalysis is one of the leading security and analysis companies in the cryptocurrency space. Gronager talked about the current bear market, pointing out that the cryptocurrency space is now affected by some of the economic forces that are affecting the traditional financial markets.
However, he believes that in the long-term, the crypto space would be driven by innovation, similar to the broader tech ecosystem or cloud computing. He said;
“I’m a firm believer that what we saw in the ’90s, you’ll see the same in the crypto space going forward,” he said, noting that despite a big shakeout when the tech bubble burst, internet companies outgrew the rest of the market. “In the next 10 or 20 years, the crypto [firms] will outgrow the rest.”
Gronager said the crypto industry has to come together to educate lawmakers about stablecoins to ensure that innovative regulations are rolled out. He stated that;
“I think it’s important to distinguish between the two main types of stablecoins. Let’s take USDC. Every dollar that you deposit to get a dollar stablecoin that you can use on the blockchains, you deposit into a big bank account at Bank of New York Mellon. Everything is super strong. I doubt that anyone believes that the money will disappear there.”
Following the collapse of the UST stablecoin, the USDT stablecoin came under pressure. However, it was able to hold its ground and the Chainalysis CEO believes that is a sign of a good stablecoin. Gronager said;
“They managed to redeem $14 billion within a week, hardly moving the price of the stablecoin at all. I think that’s another example of the efficiency in that system — any bank today, where people withdraw $14 billion, would properly stop transacting. So, it shows that the efficiency in these systems are extremely good and extremely high.”
The cryptocurrency market cap currently stands above $900 billion, with most coins down by over 60% from their all-time highs.