Bitmain’s Jihan Wu: ICO is An “Unsustainable Financial Bubble”
Of late, Jihan Wu, CEO of Bitmain, the world’s dominant cryptocurrency mining chip producer, has demonstrated his point of view on cryptocurrencies and initial coin offerings (ICO) in an interview with Coingeek.
Wu indicated that, different to traditional initial public offerings, many ICO projects are seeking funds for many “unproven variations” of blockchain technology. As thus, these projects are less likely to make profit and their tokens are just like all the other market bubbles that struggle with fluctuations in the value.
“I believe ICOs are kind of an unsustainable financial bubble. It will burst eventually… It’s just a matter of time. I believe it’s just one year or two. Either way, it (the bubble) will just disappear,” said Wu.
Obviously, it has been a difficult few weeks for Altcoins. Billions of dollars were wiped off the the altcoin market and ICOs, with some of the mainstream cryptocurrencies also suffering losses of almost 20%.
While many mainstream coins hitting their lowest price of 2018, Ethereum has become the biggest loser among them. Experts are pinning a large share of the blame on ICOs launched on the Ethereum blockchain.
According to Bloomberg, concerns over the current bear market is prompting cash-strapped ICO platforms to liquidate their tokens, that leads to a further losses of Ethereum in the days and weeks ahead.
Bitcoin Cash (BCH) also suffered from the bear market, trading for well under US$500 this week. It was reported that Bitmain is holding over 1 million BCH, that account for 5% of the total amount of Bitcoin Cash in circulation. As one of the biggest holders of BCH, Bitmain is still optimistic about this cryptocurrency.
Wu is also a Bitcoin Cash bullish and he believes that BCH is “supporting real economics”:
“Bitcoin Cash should develop its programming languages, scripting languages to support such assets. If we can do it correct and fast, Bitcoin Cash will win the future of a crypto economy,” he said.