Ethereum, Bitcoin, take huge price hits; should you be worried? Frank Holmes gives analysis
(Kitco News) - Volatility is built into the "DNA" of cryptocurrencies; investors and traders should not worry about the price drops earlier this week, said Frank Holmes, executive chairman of HIVE Blockchain Technologies.
Speaking on Ethereum and DeFi, Holmes said "I think that this is a phenomenal industry, and there's going to be many new derivatives come from it, and it has nothing but blue sky, but extremely volatile."
Holmes said that investors should understand that volatility is normal for the crypto space.
"I think we've seen this incredible volatility when something is disruptive. Think about Tesla. Tesla has the same DNA of volatility as Bitcoin and Ethereum. In fact, Ethereum is more volatile than Bitcoin, like silver is more volatiles than gold. Whenever something is disruptive, like when digital money is coming into the market in full throttle this last year, it's going to have all these naysayers and early adopters," he said.
Holmes' comment come as Ethereum tumbled nearly 25% from its highs on February 18, with Bitcoin falling 20% from its February 21 high.
Cryptocurrencies are not new to "flash crashes", Holmes said.
"This flash crash in Ethereum happened a year ago when Ethereum surged to $300, fell to $100, came right back up to $200, and sort of went sideways before it went onto these other levels," he said.