Erik Voorhees: 'Crypto Is Taking Over the World'

Erik Voorhees, the founder and CEO of cryptoasset exchange ShapeShift.io, has said that the crypto market has seen “four or five bubbles” which have resulted in extreme price fluctuations.

Voorhees, a business leadership and political economics graduate from the University of Puget Sound, noted during a recent interview with Bloomberg that “a lot” of the cryptocurrency price movements are cyclical.

He remarked:

People wait until they feel like the bottom is in...and [wait until] they feel like the bear market is over...and then they feel comfortable moving back into crypto. That’s probably the biggest reason [behind the recent crypto market rally.] Often, these things are a confluence of many different individuals making their own decisions.

According to Voorhees, there are only ten to twenty cryptocurrency projects that “have any importance” or relevance. The other cryptoassets, Voorhees said, don’t matter much and they “don’t really move” or affect the market.

Cryptos Increasingly Being Used For Remittance Payments

In response to a question about whether there’s something structural in the crypto market that encourages speculative trading, while also causing bubbles, Voorhees stated:

There have to be bubbles in crypto because [it] is taking over the world. And, it’s not going to advance 5% a month without end. If it did that, then people would start buying it up and frontrunning it, and turning it into a bubble. There’s no way to go from a zero dollar asset to one that’s worth trillions without massive speculation and massive volatility in cyclical bubbles.

Commenting on the different use cases for cryptocurrencies (so far), Voorhees pointed out that decentralized digital assets are increasingly being used in countries impacted by severe political and economic uncertainty and hyperinflation such as Venezuela.

Remittance payments using cryptoassets are also on the rise, the ShapeShift CEO revealed. However, Voorhees acknowledged that cryptocurrencies are still mainly being used to engage in speculative trading.

ShapeShift Required To Perform KYC Checks

When asked to comment on how ShapeShift first began offering convenient cryptocurrency trading services, which did not require ID checks, Voorhees said that it was somewhat similar to how people can convert their Euros to USD at airports, without having to show their passports (although this has changed recently as most major airports do require ID verification).

Voorhees also confirmed that ShapeShift’s crypto trading platform now requires users to comply with standard know-your-customer (KYC) / anti-money laundering (AML) checks. Although Voorhees believes people should not have to provide ID verification documents to engage in financial transactions, he pointed out that regulatory authorities require that exchanges perform KYC checks.