The CEO of instant cryptocurrency exchange platform ShapeShift told Bloomberg TV on May 15 that bubbles are an essential part of the industry’s growth.
Speaking in an interview, Erik Voorhees argued that the volatility seen in bitcoin (BTC) and altcoinmarkets over the years is a necessary phenomenon for a nascent asset.
“There have to be bubbles in crypto because crypto is taking over the world, and it’s not just going to advance 5% per month without end,” he told the network. He then added:
“If it did that, people would start buying it up and frontrunning it and turning it into a bubble.”
Voorhees, whose firm offers trading wholly within the cryptocurrency realm and does not involve fiat currency conversion for users, was speaking as bitcoin set its highest price in over a year.
A slow bull market which began early April gathered speed this month, with BTC/USD advancing over $8,000 to cap monthly gains of over 60%.
Voorhees did not identify a specific reason for the newfound market optimism, arguing the rise was due to mass individual trader activity.
“There’s no way to go from a zero-dollar asset into one that is worth trillions without massive speculation and massive volatility and cyclical bubbles,” he continued.
ShapeShift suffered at the hands of increasing regulatory scrutiny over the past year, Cointelegraph reporting on a sharp rise in law enforcement requests to the company.
The 2018 cryptocurrency bear market also took its toll on performance, ShapeShift making roughly one third of its staff redundant in January.