The Situation Now
In a conversation with host Melissa Lee and FM trader Brian Kelly, Charlie Lee discussed the recent Bithumb hack and the wider implications that these exchange hacks are having on cryptocurrencies and traders.
When asked about the latest attack on South Korea’s largest crypto exchange and how this affects traders perception on cryptocurrencies, Charlie Lee accepted that while traders are understandably fearful about the security of their investments, it doesn’t reflect a flaw in the cryptocurrencies themselves,
“It doesn’t really change the fundamentals of bitcoin, litecoin and other cryptocurrencies...if a bank gets broken into does that affect the price of gold?”
He also protected these exchanges, arguing that being such a lucrative target for cybercriminals means that crypto exchanges are constantly having to adapt to new threats.
“We’re very early in the crypto time frame... I think we’re getting better and better at it but we still have a lot to improve”
Charlie Lee also stressed that a key difference between crypto trading the traditional financial system is that when trading digital assets, the investors themselves are responsible for the security of their own tokens. Commenting that traders in this space should know by now that if you hold your tokens on an exchange, they will not be as safe as they would be in an offline or cold storage wallet. Traditional investors on the other hand, are not burdened with this level of financial management.
Cryptocurrencies Going Forward
In a separate question, Charlie Lee told CNBC that he is currently “excited about...lightning networks” and is bullish on this new technology taking Bitcoin, Litecoin and other cryptocurrencies out of this bearish quarter.
“Technically Bitcoin has gotten stronger and stronger over the past few years where developers are working hard on getting the second layer solution for payments working on bitcoin and litecoin... thats been going on really well”
In the same breath adding that the total invested capital flowing into the crypto market (albeit out of the market) does not seem to correlate at all with these new technological developments however.
“ ...The price has dropped like 60%-70% over the past year but the price seems kind of disjointed from the actual development of bitcoin and cryptocurrencies.. Over time I think the price will adjust. I believe we’re in the bear market right now but I have faith that the price will rebound fairly soon.”
When asked exactly how long he believed this bear market will last, the Litecoin founder responded evasively with,
“It’s really hard to say. Could be a 3 to 4 year bear market or it could recover tomorrow.”
But does accept that the recent Tether audit has done a great deal to improve overall market sentiment, putting to bed a long standing fear that Bitcoin’s huge run late last year was funded by an unbacked, illegitimate currency. From this reinstated faith, he believes that we should expect the crypto market to begin growing again, now that we know Bitcoin was fuelled “by real demand and not fake demand.”
This article appeared first on Cryptovest
