The collapse of cryptocurrency exchange FTX has dealt a painful blow to the digital asset industry, with founder Sam Bankman-Fried becoming a symbol of the problematic lack of regulation in the nascent asset class.
Despite the current low, Ronen Assia, co-founder of trading platform eToro and partner at investment fund Team8 Fintech, believes crypto is here to stay.
“It’s an industry with hundreds of millions of users who dream of an open financial infrastructure,” Assia told Calcalist’s Sophie Shulman at the Tech TLV conference. “Taking the latest meltdowns and making assumptions about the whole industry is wrong. You have to look at the revolution that this industry is trying to lead. The collapse of Enron or Bernie Madoff did not lead to the collapse of their entire industries, so I also don’t think that some of the bad decisions that have been made will mark the end of the crypto industry.
“In some cases it is indeed fraud, but in others it is a lack of regulation. We celebrated the Bar Mitzvah (13th anniversary) of Bitcoin this year. Even though this is the age at which a boy becomes a man, parental supervision is still required. I feel the same about crypto.
How much has this crisis hurt eToro?
“We are not a single asset investment platform. We have many different investment options. Our responsibility as a company is to provide users with educational tools. Due to the pandemic, many new investors have taken up trading and it is part of our role to explain to them how it works. We are also seeing investors moving from crypto to bonds and stocks.
eToro announced in July that it had agreed with Betsy Cohen-backed blank check firm FinTech Acquisition Corp to end their SPAC merger deal more than a year after it was announced. The companies announced in March 2021 that they had agreed to merge at a valuation of $10.3 billion. However, the deal was bogged down by a protracted prospectus and regulatory process and deteriorating market conditions. Nonetheless, Assia said eToro still plans to go public once the market improves.
“We still see ourselves as a public company,” he said, noting that the business can save time because it is profitable. “The processes that we built into that framework stayed. You cannot time the market. Just wait for better market conditions.
