Investing.com – As the remains reluctant to return above $30,000 for long, and after the shock of the collapse of (LUNA) and TerraUSD (UST), cryptocurrency investors are wondering if the next phase of the market will finally be a full rebound, or if, on the contrary, more pain is to be expected.
However, according to Peter Smith, CEO of cryptocurrency exchange Blockchain.com (who was speaking on a CNBC show last night), investors will have to get used to the turmoil, and did not rule out that Bitcoin is falling further, after bottoming out at $26,500 last week.
However, he recommended taking advantage of the fall to average down positions (buy back lower than the initial position to bring down the average purchase price), with caution:
“Average slowly,” Smith said, adding:
“And you have to be prepared to hold it for a while. Because we’re still in the really nascent period of building this whole financial system.”
Rather than seeing the current turmoil as a bad omen for the future of cryptocurrencies, he further opined that the long-term effects of the current turmoil will be positive, thanks to consolidation:
“What’s happening in the market is a purge of risk and leverage across the entire global market system, and we’ve certainly felt that very keenly in crypto, especially over the past few weeks. “Smith said, adding:
“I’ve been saying for a long time that this is going to be a long process of adoption and growth.”
“What you need to see is the consolidation of the market itself as well as the companies that serve the market,” he added.
He recently tweeted about the “creative destruction” that makes the crypto industry stronger in the long run, and told CNBC, “There are a lot of companies and protocols and assets where we have actually need the process of creative destruction to cross the market.”
“I would expect that in the next few weeks, after this really dramatic drop in the market, some of the risks will start to be exposed across the economy,” Smith said.
In particular, he mentioned the disappearance of companies, trading companies and funds that have not managed their risks appropriately.
“It will take a few weeks, if not months, to see the ripple effect of a really brutal two or three weeks for crypto,” he added.
Finally, he wanted to be reassuring, pointing out that Bitcoin has, throughout its history, always been able to recover from major declines:
“Every time a sharp pain has come in the way, (it) has led to a stronger industry, and a more useful industry, and real fundamental growth over the next two to three years.”