Thousands of cryptocurrencies will crash?

Thousands of cryptocurrencies will crash?

Several companies in the crypto industry have told CNBC that thousands of cryptocurrencies are likely to collapse and that the number of blockchains in existence will also decrease in the coming years.

There are more than 19,000 cryptocurrencies in existence and dozens of blockchain platforms in existence. A blockchain platform, such as Ethereum, is the underlying technology on which many of these different cryptocurrencies are built.

The recent collapse of terra USD and its digital coin luna has brought attention to the thousands of cryptocurrencies in existence and the question is whether they will all be overcome. .

“One of the effects of what we saw last week with Terra is that we're at a stage where there's basically too much blockchain out there, too many cryptocurrencies. That confuses users. And it also brings some risk to users,” Bertrand Perez, CEO of the Web3 Foundation, told CNBC at the World Economic Forum in Davos, Switzerland, last week.

“Just like in the early days of the internet, you have a lot of dot com companies and a lot of them are scams, don't bring any value and all of those companies are gone. And now we have very useful and legitimate companies.”

Brad Garlinghouse, CEO of cross-border blockchain payments firm Ripple, said it is likely that a fair amount of cryptocurrencies will remain in the future.

“I think there is a question of whether we need 19,000 new units of currency. In the fiat world, there are only about 180 currencies,” Garlinghouse said.

Guggenheim Chief Investment Officer Scott Minerd increased his pessimism last week when he said that most cryptocurrencies are "junk" but Bitcoin (BitfinexUSD) and ethereum will survive.

The industry comments come as the crypto market continues to come under pressure. Bitcoin is down more than 50% from its record high reached in November, with many other coins plummeting from their all-time highs.

Various blockchain platforms from Ethereum to Solana are vying for the top spot in the industry. But Brett Harrison, CEO of crypto exchange FTX U.S., said hundreds of exchanges that currently exist will no longer exist in the future.

“When you think about blockchains… there probably won't be hundreds of different blockchains in 10 years, I think there will just be a clear winning system for different applications,” said Harrison.

"And we'll see the market sort that out over time," he added.

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