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Hoffman hopes that Chia going public and keeping XCH as a separate token will hedge investors from wild price swings.
Chia (XCH) coin price at writing time was exchanging hands at around $406.74, up 6.6%. It has also had a 24-hour low of $380.93 and a high of $425.48. Gene Hoffman, COO, and President at Chia Network said that his network takes volatility and regulation very positively.
He went on to liken the crypto market events to those of the late ’90s when there was high volatility in internet stocks as the internet became adopted. The period between 1998-2000 marked a great trading craze in internet-related companies. Traders’ favorite companies such as Amazon experienced swings of up to 60% either way before the 2000 dot-com bubble burst.
Moreover, Hoffman said government regulation has been a major incentive for the company’s speculated early IPO via a SPAC. Volatility and regulation are inevitable teething troubles before widespread adoption of cryptocurrencies and the technology underpinning them, Hoffman said.
“Everyone who’s kind of merged their equity with their coin has generally been doing an illegal securities offering, and that can’t scale, that cannot be adopted, that cannot become the thing that governments run central bank digital currencies on,” he stated.
Billionaire entrepreneur Mark Cuban backed Hoffman’s opinion, equating crypto market turbulence to the late 1990’s dot-com bubble. Nevertheless, he expects that in January some coins will survive upcoming crushes to reach Amazon or eBay’s level.
Crypto Market Volatility and Chia Coin (XCH)
Huge volatility has struck the wider crypto market, especially in May and June. Losses accruing to $460 billion were experienced in a day after China, which accounts for the biggest percentage of crypto miners, stifled banks’ crypto-related services. Additionally, billionaire Elon Musk’s Twitter ‘trolling’ has contributed to the losses as he criticized bitcoin’s high carbon footprint and struck it out as a payment option for his Tesla Inc (NASDAQ: TSLA) EV.
Notably, regulations over cryptocurrencies have continued to tighten up, and this has affected all cryptocurrencies with the lead, bitcoin, falling over 40% from its mid-April high of $65,000. Hoffman, however, said regulation adds transparency which is crucial for users and institutions.
Chia coin began with a high appeal to investors due to its sustainable ‘farming techniques. However, just after its launch at $1,498, the coin fell by about 66% in just 3 days. Since then it has experienced high turbulence with highs of over $1,600 to lows of under $540.
Critiques have also risen, with some saying the ‘green Bitcoin alternative’ generates high electronic waste in storage devices. Hoffman responded to this saying those complaining are probably using “cheap-y” SSDs rather than the more durable but expensive ones.
Hoffman hopes that Chia going public and keeping XCH a separate token will hedge investors from wild price swings.