(Kitco News) -The cryptocurrency market will recover from recent crashes, according to Alex Mashinsky, CEO of the Celsius Network, a DeFi platform. He also expressed his view that inflation will not wipe out cryptocurrencies.
Mashinsky spoke with David Lin, Anchor and Producer at Kitco News.
Crypto Crash and Recovery
Mashinsky said that he foresees cryptocurrency markets recovering. "[Even] JP Morgan… issued a report this week saying that maybe the crypto selloff is overdone, and they see a rebound to the 38,000 [USD per Bitcoin] level from where we are today… So I think we will see a reversal over the weekend and into next week."
Mashinsky clarified that recent events are separating the crypto 'hodlers' from those who simply see crypto as a speculative investment. "Crypto divides into people who are hodlers like Michael Saylor, like the Celsius community… and [on the other side] a very large number of speculators or traders," he remarked. "[You're] definitely seeing people who are just traders [being] wiped out… All of those guys are getting cleaned out… So yes we're going to have lower numbers here, but when we're done with the selling, we should have a nice uptick in prices."
"Remember, when Bitcoin recovers it originally recovers 5 to 8 X of where it was, or even more," said Mashinsky.
Inflation and Crypto
Over the past year, U.S. inflation has risen to 8.3 percent. Bitcoin's price over the same period has fallen 9.9 percent. Yet Mashinksy remains confident in Bitcoin as an inflation hedge. "If you take a 10-year horizon, and you compare the S&P versus inflation versus Bitcoin, [Bitcoin] outperformed both of them," he explained. "The S&P lost 99 percent of its value in a decade compared to Bitcoin."
Mashinsky was also optimistic about inflation going down. "I do think that we hit peak inflation," he said. "… It takes times for the U.S. economy to refactor, recreate the supply chain. It's not happening overnight but it's [all] already in the works."
He further explained that cryptocurrencies would emerge victorious, "You have a long-term trend… migration from centralization to decentralization, from Web 2 to Web 3, and a lot of that migration involves cryptocurrencies… So no matter what happens, it doesn't matter. Even if there is inflation, all that does is just delay the inevitable which is a mass adoption of cryptocurrencies across the entire planet."
LUNA-UST crash
The recent crash in LUNA, and the algorithmic stable coin UST, has worried many crypto investors. However, Mashinsky is not one of those.
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"The LUNA-UST situation is very contained because most of the people who were in that were either on the LUNA side or on the UST side," he explained. "It's not like LUNA had connections into Bitcoin or Ethereum or 20 other projects… and Celsius had nothing to do with [LUNA or UST]. We almost had no exposure, obviously."
He went on to add, "looking at the Celsius numbers, yes we had outflows of stable coins. That was probably our number one outflow numbers in the last two weeks. But this week we've seen green numbers again… so I'm seeing a reversal already…"
To find out how Mashinsky sees gold and U.S. dollars as alternatives to cryptocurrencies, watch the above video.
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