- Jonathan Miller said that the company, which is badly using its balance sheet, got affected by crypto contagion.
- He is a managing director of Kraken Australia, a US-based crypto exchange company.
- According to Jonathan, the crypto contagion is somehow far from affecting blockchain technology.
Crypto contagion is only spreading to companies lacking in maintaining their balance sheet. Crypto contagion comes from the notorious explosion of Terra this year. Some sectors like ETH-based Defi opened up about their fundamental strengths with the current market condition this year.
What does Jonathan say about crypto contagion?
“Some of the contagion that we saw across some of the lending models in the space, [was in] this traditional finance kind of lending model sitting on top of Crypto. But what we didn’t see is a kind of catastrophic failure of the underlying protocols. And I think that’s been recognized by a lot of people.”
Jonathan further stated, “Platforms like Ethereum did not fail when the volatility hit. You saw decentralised markets, decentralised lending models, DeFi in general, not fall over. There was no contagion there. What you saw was poor balance sheet management from closed shop trade fee lenders.”
As he said, blockchain projects run on “obviously poor” protocols. He refers to Terra’s algorithmic stablecoin USTC. He also added, “I think that’s a trade-off. There’s a Treasury management problem, not a blockchain problem.”
What Strategy Does Kraken Follow?
The managing director of Kraken shares its working strategy even after the bearish market trend. He said, “We’re in a slightly different position as some of the other exchanges that have been out there spending lots of money on advertising. We’ve got a really strong word-of-mouth business model.”
Jonathan is also confident about the Australian crypto sector. As his words were “bullish underlying signals from businesses who are still building products.”
On the other hand, he further said, “So you know, institutions making use of the underlying tech, maybe some heat out of some of the speculative characteristics, that we saw through 2022, which is potentially even a good thing.”
Jonathan made his opinion as per the current market trend. He clarifies their company strategies and the major effect of Crypto contagions in crypto companies.
Source: https://www.thecoinrepublic.com/2022/08/03/crypto-contagion-only-targets-poor-balance-sheet-management-companies/