April 20, 2024

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[THE INVESTOR] Is there a blockchain “bubble” that is about to burst?

Da Hongfei, founder of NEO, believes that there is bubble in some blockchain projects and the price of some tokens, that has partially burst already. 

From left) Ella Zhang, head of Binance Labs; Da Hongfei, founder of NEO; Lon Wong, founder and CEO of ProximaX; Philipp Sandner, head of Frankfurt School Blockchain Center at the Frankfurt School of Finance and Management; and Michael Arrington, partner of Arrington XRP Capital discuss pressing issues at the Cap: Blockchain experts discuss during a session at Blockchain Partners Summit held in Seoul on July 21-22.

“The bubble has partially burst already with the price of all the tokens dropping by half,” Da told participants in a panel session of Blockchain Partners Summit held in Seoul on July 21.

However, Michael Arrington, partner of Arrington XRP Capital begged to differ. “What bubble? It’s not a bubble. We’ve got to stop use that word,” said the venture capitalist who has vowed to focus on the blockchain industry.

“Price fluctuations are obvious to me and it’s a sign of a healthy market.” he said, adding that blockhain is “going to be multitrillion dollar industry very soon.”

Lon Wong, founder and CEO of ProximaX, compared the current cryptocurrency market with the equity and commodities markets. “I think the rising trend should continue in the long run unless there is government intervention.”

Even though experts are divided on whether there is bubble, most of them on the panel agreed that there is no blockchain bubble as of now.

“Maybe there are some cryptocurrencies that are overpriced and there could be a bubble, mostly in the initial coin offerings,” said Philipp Sandner, head of the Frankfurt School Blockchain Center. “Considering this is a new institutional technology, the current price levels are way too low.”

Da and Sandner cited “a new institutional paradigm,” which is way more valuable than the internet and is bringing about fundamental changes in the society.

“The impact would be so much bigger than an internet firm considering that the technology is underappreciated,” Da said.

By Park Ga-young (gypark@heraldcorop.com)