“These wild swings are not unusual in crypto, and the broader market uncertainty clearly made matters worse,” said Christian Catalini , founder of the MIT Cryptoeconomics Lab, and a research scientist at the MIT Sloan School. “The technology is still at an extremely early stage, and will take multiple years to deliver on its potential.”
What’s unusual, he said, is the ability to track its progress day by day.
“Imagine if you had been able to track the stock price of Apple, Microsoft or really any other technology company from the day it was incorporated and well before it went public,” Catalini said. “You probably would have witnessed similar, massive swings in price.”
‘A Lot of Drama’
“While we may see some consolidations, I don’t see founder-led companies looking to be acquired just because of the correction,” he said. “If anything, the correction will increase the quality bar for new projects being funded, something that will be healthy for the space.”
George Geis, law professor at the University of Virginia , said he thinks the current crypto situation differs from the dot-com debacle of yesteryear, “though there are certainly some parallels–such as questionable business models and vast waves of capital coming into this space.”
“I do think there will be a wave of consolidation,” he said. “Companies will be scrambling to avoid becoming the next ‘Celsius,’ and traditional financial services firms are carefully considering whether now is the right time to acquire a crypto foothold.”
Geis said he would also keep a close eye on some of the crypto whales, such as FTX, “who seem to be quite interested in consolidation opportunities.”
“It’s an interesting moment for crypto, and I expect a lot of drama in the coming months,” he said.
