Professor Kevin Werbach sees crypto market in crisis in 2022
Professor Kevin Werbach from Wharton Business School believes an 80 percent crash of the entire crypto industry is possible in 2022.
There are only two weeks left to 2021 and the crypto market doesn’t look particularly exciting for investors. Professor Kevin Werbach of Wharton Business School, which by many experts has a better reputation than Harvard, believes things won’t get any better next year. On the contrary: Kevin Werbach predicts a crypto winter for the coming year because Web 3.0 and Metaverse are already being hyped, but are still completely unrealistic in practice.
The crypto industry has come under great pressure in the past few weeks. Bitcoin, the world’s largest cryptocurrency, is down 33% from its all-time high of $ 69,000 in November. This triggered a domino effect on the other altcoins.
In the downtrend, investment inflows into digital investment products slowed to $ 88 million last week, compared to $ 184 million the previous week. In addition, macro headwinds are a major drag as the US Federal Reserve accelerates the pace of tapering. In addition, interest rate hikes could come faster than expected in the coming year. Werbach told Business Insider:
“The markets don’t rise forever. All of the folks who got into cryptocurrencies in the past two years have only seen cryptocurrencies boom. But the entire crypto market, including the introduction of Bitcoin in 2009, only developed in a bull market after a global financial crisis. “
80% Bitcoin crash possible
After the 2017 crypto boom, Bitcoin fell 80% in 2018. However, many crypto amateurs seem to believe that such corrections are a thing of the past, given how much engagement the institutions have been doing recently. However, Werbach is convinced that 80 percent crashes in the crypto market are still very possible today:
“When you’re in a bubble – and we are clearly in a bubble right now – it’s just impossible to think clearly. It is impossible to tell that at some point the bubble will burst. I don’t know exactly when that will happen, but that is exactly what will happen to the crypto market at some point. And then we will see what is real and what is not. “
Web 3.0 and Metaverse unrealistic?
The two concepts of Web 3.0 and Metaverse have recently picked up speed. Also, crypto projects related to it have seen tremendous growth in the past two months and there have been tremendous investment inflows in both sectors.
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Kevin Werbach believes that we are still in the very early stages of development and that these concepts come too early to be realistic. He executes :
“The idea of a virtual world with assets that people can actually own and that can be integrated and taken along across different platforms fits perfectly and naturally with blockchains with which these types of assets can be securely recorded and represented. So this will come, but the current hype is way ahead of reality. The aspirations and beliefs that many people have and the desire for a truly inclusive, participatory, open online universe is a very legitimate thing. But then you look at what actually happens. Most of the activity is still financial speculation, most of these platforms are still very immature. “