dailyhodl.com
The CEO of crypto fund Pantera Capital, Dan Morehead, believes the worst of the crypto downturn may be over.
Morehead, whose firm manages assets totaling approximately $5.1 billion, says the worst of the crypto crash occurred in May and June when the stresses in the system peaked.
“I think we’re really close to the end. In any leverage situation and particularly with DeFi [decentralized finance] smart contracts, things do get liquidated pretty quickly.
And the market’s actually been going down for eight months. The high was in November so whatever stresses we were going to see in the system, they basically peaked in May and June. We already have companies that are in bankruptcy court liquidating.
It feels like we have seen all that we have to. The markets can start trading on fundamentals again.”
The Pantera Capital CEO says that during the worst months for the crypto industry this year, nearly all decentralized finance (DeFi) protocols performed well and it’s the centralized crypto lenders that failed.
“There’s a lot of skeptics on blockchain and many of them are promoting the view that DeFi failed. And that really isn’t true. There are certainly some failures in the blockchain ecosystem but almost all of them are centralized lending counterparties. Which, you know, really are essentially banks.
Some of these entities operated just like banks, took in short-term deposits for that long. And then you had that old-fashioned run on the bank. And people wanted their cash now, and they were invested in things that didn’t have liquidity.
It really is essentially the centralized lending companies that failed and almost all the DeFi protocols did very well.”