In 2018, it’s a little harder to see what was the factor that caused the drop, because DeFi was not as big as it is today and there was no problem on stablecoins. I think there was a media hype around bitcoin, which was overhyped. At the bitcoin house [l’ancien nom de Coinhouse, NDLR], I remember we had up to 400 people queuing outside to come and buy cryptocurrencies. It was very retail-driven and there were people who could wait two hours to go and buy ripple and other cryptocurrencies that were more exotic and much less interesting than bitcoin and ethereum.
At the time, retail pretended to have understood cryptocurrencies and was betting on them in casino mode, when it was absolutely wrong to think that way. The sector saw it as a source of interest, without really understanding what it was, and people came saying they wanted to buy several cryptocurrencies, as if they were doing their market on a Saturday morning in Saint-Paul-de -Vence to buy courgettes. Honestly, it lacked intelligence and education.
Right now, it’s not the same. This time it was innovation that caused the downfall. The excess of innovation, the excess of confidence, especially in DeFi, in certain forms of technology, the youth of certain people who carry out projects, especially around the Luna foundation and other protocols, has sharpened the appetite of very intelligent, but particularly Machiavellian people in this industry or that of traditional finance, who believed that there was money to be made.
What happened on Luna is not at all a Ponzi scheme or a technological crash, it is a real Soros attack, which consists, as when there was the attack on the sterling, to take advantage of an unbalanced protocol and a bear market with a falling bitcoin, to borrow a lot of money and thus sell a large amount of Luna to derail the protocol.
The attack was masterfully carried out, and the protocol, which was unbalanced, failed to resist. I think we have experienced a phenomenon very close to Lehman Brothers in the world of cryptocurrencies. Behind, there was a chain reaction. We saw it in 2008 with the phenomenon of subprime unfortunately on a much more dramatic scale. But in crypto finance, which is less developed than global finance, the phenomenon is contained.
The impact was very violent, because it is still a very young sector. If one of the stablecoins had been shaken, the phenomenon would have been much more massive. But in this case, the industry is strong and healthy enough to fix its problems. Finally, we cleared the area of people who were far too greedy [avide en anglais, NDLR].
It should also be remembered that people who are interested in cryptocurrencies are not just geeks driven by the spirit of innovation. There are also speculators who somewhat forget the rules. When Celsius [plateforme qui s’est déclarée en faillite à la mi-juillet, NDLR] offers crazy returns compared to other players in the sector, no one wonders how it is possible. It’s very good that it cleans up the market a bit, pushing people away greedy who have a lack of knowledge and who want to free themselves from the rules. Now, we will be able to work on much healthier bases.