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The bitcoin price has climbed to over $21,000 per bitcoin, up from under $19,000 last week, while the ethereum price has topped $1,200 per ether despite crypto being branded “the biggest Ponzi scheme in human history.”
Now, as many bitcoin and ethereum investors reaffirm their commitment, crypto billionaire Sam Bankman-Fried has warned “a substantial fraction” of cryptocurrencies are “empty products” with “real crash potential.”
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Bitcoin and crypto billionaire Sam Bankman-Fried has warnerd can be hard to tell healthy crypto … [+]
“When you have something that’s basically an empty product, which is true of some places and assets in crypto, that is something that certainly has real crash potential,” Bankman-Fried told CNN.
“By market cap or volume, a pretty small fraction of the crypto eco-system represents this; however, by number of assets, it’s a substantial fraction.”
There are currently just over 20,000 separate cryptocurrencies listed on market tracking CoinMarketCap, with bitcoin and ethereum contributing the majority of the market’s value.
“The general pattern is of a long tail of assets that has very little usage and is primarily just speculation,” Bankman-Fried said, adding that there is “this deeper core that has much more usage and “at least a reasonable sense of real future use.”
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The bitcoin price has climbed over the last 24 hours, boosting the price of ethereum, but its rally … [+]
Bankman-Fried was also asked about a recent Bloomberg interview where he seemed to suggest many crypto projects were similar to Ponzi schemes that only provide value due to new users putting cash in.
“What I was pointing at is how many of these things are basically purely economic speculation with no real use case potential,” Bankman-Fried. “It’s not always obvious which is which. We can do what we can to try to distinguish them and offer assets that are healthy for the ecosystem but we’re not going to be perfect at that, no one will.”
The latest bitcoin, ethereum and crypto price crash has wiped around $2 trillion from the combined crypto market and caused turmoil for many crypto companies that have sturggled to maintain operations.
Crypto lenders, such as Celsius and BlockFi, have been forced to suspend or limit user withdrawals while some investment companies have declared bankruptcy.
