Coinbase co-founder Fred Ehrsam has issued a stark warning that “most” cryptocurrencies and blockchain-based assets like NFTs “won’t work” and will have “little to no value in three to five years” following recent crashes in the market.
Ehrsam’s comments come after Bitcoin has continued to drop in value in recent days after a short spike off the back of more tweets from Tesla founder Elon Musk over the weekend.
“People are going to try all sorts of things,” Ehrsam told Bloomberg earlier this week.
“There’ll be millions and millions of cryptocurrencies and crypto-assets, just like there were millions and millions of websites. Most of them won’t work.”
As it currently stands, the total combined value of the cryptocurrency market has dropped by as much as $US1 trillion since May 2021, sitting at just below $2 trillion.
The value of Bitcoin in particular is currently moving in a pattern known as the “death cross”, in which the 50-day average falls below the 200-day average.
However, it’s worth noting that the last time this pattern was observed – in March 2020 – it actually resulted in a huge price surge that saw a significant rise in both Bitcoin and other cryptocurrency’s values.
Interestingly, he advised investors not to dismiss the profitability and long term growth of meme coins like Doge, which has increased the overall popularity of the cryptocurrency market substantially in recent months.
“If crypto has taught us anything, it’s never to dismiss a good meme that couldn’t later manifest into more concrete progress,” he said.
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In addition to warning about Bitcoin, Ehrsam specifically urged investors not to hedge their bets on the NFT market, which is probably a fair criticism considering experts already believe the NFT bubble has burst.
Specifically, he likened the NFT boom to the early days of the internet, which saw dozens of Silicon Valley startups get overvalued, only to fold months or years later. He believes most NFTs will be worthless within the decade.
“I’d go so far as to say that 90% of NFTs produced, they probably will have little to no value in three to five years,” he said, asserting that if the bubble hasn’t already burst, it will soon.
“You could say the same thing about early internet companies in the late ’90s.”
Ironically, his comments come after internet inventor Tim Berners-Lee made the decision to auction off the original source code of the world wide web as an NFT last week.