Many crypto industry players told CNBC that thousands of digital assets are likely to plummet in value while the amount of blockchains total will also fall in the next few years.
There are nearly 20,000 cryptocurrencies that exist at the moment and also dozens of blockchain platforms. A blockchain platform is the underlying technology that digital assets fall onto, such as Ethereum.
The collapse of the stablecoin Terra earlier this month has caused many to question the survivability of many cryptocurrencies.
Bertrand Perez, CEO of the Web3 Foundation, told CNBC at the World Economic Forum in Davos, Switzerland earlier this week, “One of the effects of what we’ve seen last week with the Terra issue is we’re at the stage where basically there are far too many blockchains out there, too many tokens. And that’s confusing users. And that’s also bringing some risks for the users.”
“Like at the beginning of the internet, you were having lots of dotcom companies and lots of them were scams, and were not bringing any value and all that got cleared. And now we have very useful and legit companies.”
Brad Garlinghouse, CEO of payment processing company Ripple, said there is likely to be “scores” of cryptocurrencies that remain in the future.
“I think there’s a question about whether or not we need 19,000 new currencies today. In the fiat world, there’s maybe 180 currencies,” Garlinghouse said.
To fuel the pessimism further, Guggenheim Chief Investment Officer Scott Minerd said last week that most crypto is “junk” but that he believed that the only ones to survive would be ethereum and bitcoin.
These comments come at a time of immense market pressure. OG coin, bitcoin, is down more than 50% from its record high hit late 2021, and most other coins are also down significantly.
All the many blockchains in the space are battling to become the dominating platform in the future, like blockchains Solana and Ethereum. But Brett Harrison, CEO of FTX U.S., said that the hundreds of blochchains currently in existence will not all survive.
“When you think about the blockchains … there probably won’t be hundreds of different blockchains in 10 years, I think there’ll be a couple of clear winners for different kinds of applications,” Harrison said.
“And we’ll see the market … sort that out over time,” he continued.