Michael Novogratz claims that the growing economic crisis has set back crypto adoption by twelve to eighteen months. He made this statement in an interview with Anthony Pompliano, where he weighed in on many of the impending challenges facing the global financial space that are growing due to the spread of COVID-19.
NEED FOR QUICK FIAT DRIVING CRYPTO SELL OFF
Novogratz’s comments reflect many of the fears cascading throughout the crypto space, as market uncertainty has resulted in significant volatility.
As far as crypto is concerned, this probably sets the story, the narrative, of new adoption in bitcoin as a store of value or in the other coins as part of the future of building a decentralized internet. It sets it back 12-18 months… we’re gonna have to get through this and then you have to rebuild confidence
Pompliano posted the interview on Twitter:
Demo Twitter Live Stream https://t.co/61Zf8W9Iuz
— Pomp 🌪 (@APompliano) March 16, 2020
The Galaxy Digital CEO noted that a key issue facing the crypto space is the fact that workers around the world are facing a cash shortage due to work stoppages. Thus, people are selling assets that they would normally hold long-term to acquire money needed for basic necessities. He observed that this problem is also causing gold to decline, and could get much worse in the short term if workers remain cash-flow negative.
In a liquidity crisis, anything people are longing are going to get sold. People are max long gold, and they’re selling it.
A bright spot, according to Novogratz, is that once the crisis abates there will be a significant amount of liquidity, which is all but certain to result in a rapid economic recovery. He asserts that in this environment Bitcoin prices will be in a strong position to move much higher.
DEVELOPMENT MOVES AHEAD DESPITE UNCERTAINTY
The significant worries surrounding the crypto market have yet to have an impact on development teams. Nevertheless, there can be little doubt that many will have to adapt to this new economic reality. Many were already struggling financially before the present crisis, and will now need to find ways to become even more efficient.
Fortunately, the most competent and promising teams have enthusiastic members, many of whom are willing and able to work with limited resources. Thus, platform development should continue, albeit possibly at a slower pace.
Perhaps the greatest setback will be real-world adoption, as global businesses may be reluctant to invest in new technology or processes during times of financial uncertainty. Nevertheless, given blockchain’s revolutionary appeal, any delays in its widespread adoption will be temporary.
It seems to people do not have a trust to $BTC and crypto? I think adoption is slow or in some cases stopped!
Thanks for following. Have a good day!
— Jacek Mering (@JacekMering) March 17, 2020
There should thus be no question that although the crypto space continues to experience disruption, it is also proving to be extremely resilient. Over the next several weeks more analysts will no-doubt weigh in on its future amid the growing global economic turmoil, yet it has a solid foundation that is sure to survive long-term.
Do you think crypto adoption will be set back from the current financial crisis? Add your thoughts below!
Images via Shutterstock, Twitter @Apompliano @JacekMering