Crypto winter ‘only going to get worse,’ blockchain firm CEO says
There’s something about the latest crypto crash that makes it different from previous downturns.
Artur Widak | Nurphoto | Getty Images
The ongoing crypto winter is “only going to get worse” as the industry recalibrates to a higher interest rate world, according to the chief executive of blockchain firm Tezos.
Asked about the fall in price of many crypto assets this year, Kathleen Breitman said: “A lot of this was inflated on cheap money, and a lot of this was backed by basically, like, VCs trying to pump.”
“There was a lot of easy money going into the system and I think it was artificially stoking a number of different things, mainly valuations of these companies,” she told CNBC’s Karen Tso Wednesday at the Web Summit conference in Lisbon, Portugal.
Breitman cited NFT marketplace OpenSea, where trading volume plunged from $2.9 billion in September 2021 to $349 million in September 2022, according to data from Dune Analytics.
“Clearly there is a phenomenon that has kind of crested and gone away in a lot of these markets, but meanwhile they’re saddled with a $13 billion valuation,” Breitman said.
“So I think there’s a lot of cheap money that went in, valuations went super sky high, you had people scrambling to make those valuations justified in some form, usually through cheap tactics like yield farming, and now that the easy money’s gone away, all that’s left is we’re getting communities, I hope,” she continued.
On whether the pause in Federal Reserve rate hikes that economists expect next year could see crypto markets rally, Breitman said there would still be a shift in crypto and tech valuations being based on anticipatory benefits to actual user growth; and without the ability to keep using “cheap tactics” to get “easy come, easy go” users in the door.
“Crypto hasn’t been evaluated by that metric, and neither has technology in the last 10 years that we’ve had low interest rates,” Breitman told CNBC. “It remains to be seen, but basically I think what you’ll find is the things that are useful are going to thrive.”
“But that’s the small minority of crypto applications, whether people want to admit it or not.”
Tezos, which Breitman also co-founded, is a smart contract platform, like the better-known Ethereum, but that allows token holders to vote on changes to the platform before they are enacted every few months.
Usage of the network has increased on 2021, Breitman said, driven by demand from the art world, where digital artists are minting art on the blockchain and trading it. This use is providing one of the only sources of organic growth in the industry more broadly, she said.
The notion of the end of the era of easy money in crypto is one that analysts have been discussing in recent months amid the downturn.
Some industry figures believe the recent relative price stabilization of assets such as bitcoin, which has been trading between $18,000 and $25,000 for the last four months after experiencing massive volatility, is positive for the industry.
Antoni Trenchev, co-founder of crypto lender Nexo, previously told CNBC bitcoin’s performance was “a strong sign that the digital assets market has matured and is becoming less fragmented.”
Technology
AppLovin stock tanks on report SEC is investigating company over data-collection practices
The AppLovin logo arranged on a smartphone in New York, US, on Wednesday, Feb. 26, 2025.
Gabby Jones | Bloomberg | Getty Images
AppLovin shares plummeted on Monday after Bloomberg reported that the SEC has been probing the mobile advertising company over its data-collection practices.
The agency has been looking into whether the company violated agreements on pushing targeted ads to consumers, Bloomberg reported, citing people familiar with the matter. The report said that the SEC is responding to a whistleblower complained filed this year along with multiple short-seller reports, and added that neither the company nor its officials have been accused of wrongdoing.
An AppLovin spokesperson said the company doesn’t typically comment on the “existence or non-existence” of regulatory matters.
“That said, as a global public company, we regularly engage with regulators and if we get inquiries we address them in the ordinary course,” the spokesperson said in a statement. “Material developments, if any, would be disclosed through the appropriate public channels.”
The stock dropped 14% in regular trading after the report, which landed shortly before market close. It fell another 5% in extended trading.
AppLovin’s stock has been on a tear, jumping about 80% this year after soaring more than 700% in 2024. The surge has been driven by the company’s artificial intelligence technology that’s allowed it to provide better ad targeting capabilities to brands.
Last month, AppLovin was added to the S&P 500, replacing MarketAxess Holdings, at the same time that Robinhood joined the index in place of Caesars Entertainment.
AppLovin made the move into the benchmark despite a short-seller’s effort to keep it out.
In March, Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500.
Three notable short-seller firms, including Fuzzy Panda, have slammed AppLovin of late. The latest was Muddy Waters Research, which in March said the company’s ad tactics “systematically” violate app stores’ terms of service by “impermissibly extracting proprietary IDs from Meta, Snap, TikTok, Reddit, Google, and others.” In so doing, AppLovin is funneling targeted ads to users without their consent, Muddy Waters said.
Fuzzy Panda and Culper Research put out reports the prior month, taking aim at AppLovin’s AXON software, which drove its earnings growth and stock surge. The shares dropped 12% on Feb. 26, the day of the short reports.
After those reports were published, AppLovin CEO Adam Foroughi wrote a blog post, defending his company’s technology and practices, and taking aim at the short sellers trying to profit from AppLovin’s decline.
Figma signage appears at the New York Stock Exchange in New York as the company prepares for its shares to begin trading on July 31, 2025.
Michael Nagle | Bloomberg | Getty Images
Figma shares jumped 7% on Monday after the design software vendor’s technology was promoted by OpenAI CEO Sam Altman in an onstage demo at his company’s annual DevDay conference in San Francisco.
Altman discussed Figma’s integration into ChatGPT, which has more than 800 million monthly users. He showed how third-party applications could plug in with OpenAI’s Apps SDK, or software development framework.
“When someone’s using ChatGPT, you’ll be able to find an app by asking for it by name,” Altman said. “For example, you could sketch out a product flow for ChatGPT and then say, Figma, turn this sketch into a workable diagram. The Figma app will take over respond and complete the action.”
In addition to asking for Figma’s help by name in ChatGPT, the assistant can also suggest Figma when it’s relevant, Figma product manager Luke Zhang said in a blog post.
The rally for Figma, at its high point, was the steepest since the day of the company’s public market debut on the New York Stock Exchange in July.
Figma has been ramping up its own tools for working on app and website designs using generative AI models from OpenAI and other providers.
Subscribers to products that connect to the Apps SDK will be able to log in without leaving their ChatGPT conversations, Altman said. He said people working on products in Figma can also launch the FigJam tool to keep working on development ideas. Apps SDK is based on the Model Context Protocol, an open standard that OpenAI rival Anthropic introduced last year.
Software developers will be able to submit apps for review later in 2025, Altman said.
Over time, OpenAI will offer many ways to generate revenue through third-party integrations, Altman said. Last week, OpenAI announced a feature allowing people to buy products listed on Etsy through ChatGPT.
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