The greatest risk to cryptocurrencies lies not in a potential U.S. recession, but in their inherently ‘cyclical’ economy. This was stated by Tezos co-founder Arthur Breitman in an interview with Cointelegraph.
“The industry is still seeking its footing. If the only reason people want to buy a token is the expectation that others will buy it, then it’s a circular scheme,” he added.
The entrepreneur emphasized that this distinguishes the cryptocurrency market from the stock market, which is “built on revenue-generating businesses.” In other words, the ‘lack of fundamentality’ poses a threat to the asset class, Breitman added.
Separately, the Tezos co-founder noted the risks of a recession due to traditional signs of its approach and the correlation of coins with tech stocks.
Earlier, François Villeroy de Galhau, a member of the governing council of the ECB, saw in U.S. policy towards cryptocurrencies the makings of a ‘new financial catastrophe.’
Previously, the institution’s advisor Jürgen Schaaf stated that Bitcoin is unsuitable for national reserves due to its high volatility, lack of real economic value, and susceptibility to manipulation.