Cryptocurrency Epidemic Set To Infect Only Mismanaged Firms

Cryptocurrency epidemic set to infect only mismanaged firms according to Kraken Aus boss, Jonathon Miller, stating also that the blockchain technology at its core was unaffected by the cryptocurrency epidemic; it only affected organizations who mismanaged their treasuries.

Jonathon Miller, managing director of Kraken Australia, claims that the cryptocurrency contagion brought on by Terra’s historic fall this year only affected businesses and protocols with “poor balance sheet management” and not the underlying blockchain technology.

The head of the Australian cryptocurrency exchange said that this year’s tough market conditions allowed industries like Ethereum-based decentralized finance (DeFi) to demonstrate their underlying strength, while also stating that some of the contagion (epidemic) that we have seen across some of the lending models in the space, was in a traditional finance kind of lending model that was sitting on top of crypto. He continued by stating that we didn’t see it as a catastrophic failure of the underlying protocols. He thinks that has been recognized by a lot of people now.

When the volatility came, platforms like Ethereum did not collapse. You saw that decentralized loan schemes, markets, and DeFi, in general, did not collapse. There was no spread of infection. Poor balance sheet management from closed shop trade fee lenders is what you observed, he continued.

Miller made this statement despite CoinGecko stating that the market cap for DeFi fell by 74.6 percent in Q2 2022 as a result of Terra’s demise and an increase in DeFi exploits. However, the cryptocurrency data aggregator also pointed out that the sector was able to hold onto the majority of its daily active users.

According to Miller, blockchain initiatives only encountered problems when the underlying protocols were “clearly poor” designed, like in the case of Terra’s algorithmic stablecoin TerraClassic USD (USTC).

He believes that is a compromise. Not blockchain, but Treasury management, is the issue, he insisted.

Miller responded that Kraken was well prepared to handle the volatility when asked how the company performed during this year’s crypto bear market. In its 11-year history, the company has weathered multiple downturns, and he pointed out that it was notable that it didn’t spend a lot of money on marketing during the bull run last year.

Read the latest in cryptocurrency news.