- Investors shouldn’t pay much attention to the short-term drops in the value of bitcoin, MoonPay’s CEO said.
- It’s normal for regulation to be a couple steps behind financial innovation, Ivan Soto-Wright said.
- Further waves of retail adoption will allow cryptocurrencies to have everyday use cases, he predicted.
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Crypto investors shouldn’t be too focused on short-term swings because prices will become less volatile as adoption expands, according to Ivan Soto-Wright, co-founder and CEO of MoonPay.
“Bitcoin is one of the best performing asset classes if you look at the last five years,” he told Insider in an interview. “So when you take the long-term horizon, you don’t look day-to-day or month -to-month.”
Bitcoin has rebounded to trade near $40,000 after three consecutive months of losses that were driven by a host of worldwide crackdowns on crypto trading and mining. Experts across the digital asset space called China’s crackdown the largest sovereign assault on the asset class since its inception, a report from Galaxy Digital showed.
It’s gained 34% in value so far this year, and is 107% higher in the last 12 months.
Soto-Wright, who launched MoonPay in March 2019, got excited about cryptocurrencies after his friend wrote a thesis on bitcoin during college, making him see the potential of financial inclusion for both the banked and the un-banked.
He said it’s only expected for regulators to take their time in making sure customers are safeguarded, and for crypto-focused companies to find the right balance between financial innovation and customer protection.
“The great thing that will make the industry thrive in the long term is having clarity over what those rules are in different parts of the world,” he said. “Regulators are always a couple steps behind the financial innovation component, and that’s where some of the friction arises.”
Soto-Wright spoke about ethereum’s growing efficiency, and how blockchain technologists are committed to scaling digital assets through improvements and upgrades to base protocols.
The ethereum network underpins a number of different technologies, including sales of non-fungible tokens (NFTs), which come with huge hidden premia also known as “gas fees.”
He said crypto skeptics are right in that digital assets cannot be used to buy something as simple as coffee, but waves of adoption are yet to come in and allow for scaling to everyday use cases.
But as more people enter the crypto-economy, it will progress and become less expensive to make transactions, just like telephonic communication evolved from pricey long-distance phone calls, to free video-conferencing over the likes of Skype and Zoom, Soto-Wright said.