Most crypto companies will ‘crash’ after years of industrial Ponzi schemes: Palantir co-founder
More crypto companies will fall into Ponzi scheme-style bankruptcy, but cryptocurrency will remain a critical tool for exchange funds globally, a venture capitalist told Fox News.
“In general, I think most things are going to crash,” said Joe Lonsdale, investor and co-founder of software company Palantir. Various cryptocurrency lenders, crypto tokens, and other parts of the ecosystem were “a Ponzi scheme, and it made absolutely no sense.”
“It’s what you would expect in any situation where you have things out of order,” he added.
The WATCH PALANTIR co-founder predicts the future of CRYPTO exchanges:
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Over the past several years, Lonsdale said, “crypto projects have been evaluated not on the basis of cash flows, not on the basis of value creation in the economy, but on what people are going to pay for it.”
FTX, a Bahamas-based crypto exchange, filed for Chapter 11 bankruptcy in early November after losing at least $1 billion.
Another major cryptocurrency firm, BlockFi, also filed for bankruptcy last week, after other crypto firms such as Celsius Network and Voyager Digital entered Chapter 11 proceedings.
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Some of the companies that declared bankruptcy “had a lot of corruption,” Lonsdale said, though he only named FTX. “Longer term, there is a large portion of cryptocurrency, but most of what we have seen in digital currencies in the last three, four, five years has been a speculative bubble driven by cheap money and driven by a lot of these Ponzi schemes.”
Despite the recent turmoil in the cryptocurrency markets, crypto-based technologies will continue to develop more capabilities, according to Lonsdale. Lonsdale said that the Blockchain technology used in cryptocurrencies allows money to be transferred online without the use of traditional government or banking infrastructure, enabling a new and important way to move money globally.
“It makes sense to have more decentralized power and to have something like bitcoin,” he said. “He helped people get money out of Russia, out of Venezuela, out of China.”
“It allows a greater kind of freedom to the financial system than really badly behaved governments,” Lonsdale continued.
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The venture capitalist said that Blockchain technology will continue to be an important part of the future.
“This ecosystem, in the long run, I think you’re going to have some of these things that are shown to be beneficial to the world,” he said. “But that’s not all we see now.”
To see the full interview with Joe Lonsdale on the future of crypto, click here.
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