There’s more crypto destruction to come: Blockchain.com CEO

Do Kwon, the founder of Terra and Terraform Labs, said that investors who experienced their first bout of panic in recent weeks should get used to it.

Smith says that more risk will be exposed, but that it is a good thing for the economy.

He says the lesson of the past few weeks should be to slowly build a position in an asset over time so your money isn't exposed to any.

Smith told CNBC that average into it slowly.

The price of the digital currency hit its lowest level since December 2020 earlier this week, and shares of the publicly traded company were down by as much as 74% this week.

Smith said that you need to be prepared to hold it for some time.

One of the more established players in the space, founded in 2011, was ranked 7 on the CNBC Disruptor 50 list.

The institutions that had piled into the space pulled out in droves, leaving many rookies with the bag, a classic outcome of a market bubble.

The market is a washout of risk and leverage across the entire global market system, and we felt that in the past few weeks.

The process will lead to more destruction in the short term as weaker links are wiped out.

There is a chart.

Line chart with 3266 data points.The chart has 1 X axis displaying Time. Range: 2022-01-03 10:00:00 to 2022-05-19 12:00:00.The chart has 1 Y axis displaying values. Range: 25000 to 50000.End of interactive chart.

Smith said that you need to see consolidation in the market itself as well as the companies that serve it.

He told CNBC that there are a lot of companies and protocols that need the process of creative destruction to come through.

Some of the risks will start to be exposed through the economy in the next few weeks, Smith said.

The companies, trading firms and funds that haven't been managing their risks will be included.

It will take a few weeks, if not months, to see the impact of a really brutal two or three weeks for the coin.

Smith told CNBC that the market cycle in the volatile sector has been brutal on the way in.

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