Businessman and crypto investor Kevin O'Leary, Mark Cuban's "Shark Tank" co-star, slammed Ethereum as he gave his own insights on the blockchain's scaling problems.
O'Leary said in an interview with CNBC that he finds Ethereum "very slow". And because of this, he said, "different blockchains will emerge."
Clear Rules Should Govern Cryptos: Kevin O'Leary Tells Regulators
Because of this, O'Leary called on U.S. regulators to hand down clear rules to govern the crypto market, stressing that investors would refuse to be "cowboys" in dealing with digital assets sans a dependable regulatory framework.
O'Leary said he would not want to get involved in crypto "if regulators say it's inappropriate." He added in the interview, "I can't afford to be noncompliant," per Markets Insider.
O'Leary also called the U.S. Securities and Exchange Commission's deferred action on Coinbase's Lend product "a slowdown in regulation." The SEC threatened to sue Coinbase over the crypto lending product, which it said pays stablecoin owners four percent interest on their savings.
While O'Leary criticized Ethereum's speed, he remained bullish on decentralized finance--a main use case on ETH. He said DeFi is "not just about Bitcoin anymore or Ethereum," stressing that the industry is wider than the two main cryptocurrencies.
While the famous businessman, who is dubbed "Mr. Wonderful," stated that crypto assets are still not yet considered as institutional assets, he believes that cryptos will eventually achieve that status.
He added that once the SEC approves Bitcoin as an Exchange-Traded Fund, or a fund that can be traded on an exchange like a stock, the market for the asset will grow another $1 trillion.
Ethereum rose 0.86 percent in the last 24 hours on Tuesday to $3,297.29, but it actually slumped from $4,037 on September 3, a near 20 percent fall.
Factors Behind Ethereum Price Slump
According to A3 Investing News, this drop is due to an overall sell-off in cryptocurrencies, with Bitcoin seeing its value plummet from a September high of $62,000 to about $44,680. Also, overall profit taking took its toll on Ethereum after its August rally. ETH soared from $1,700 in the last week of August to $4,000 in early September.
Another factor is the DeFi industry performance which had a negative impact on ETH prices. DeFi industry value dropped from $90 billion last week to $84 billion on Monday.
With Ethereum's decline, the asset is staying below 25-day and 50-day moving averages, hovering above the 38.2 percent retracement level. Because of this, the direction for its least resistance should be on the downside, especially if prices move below last week's low of $3,013. On the other hand, a direction towards $3,490 will discard the bearish sentiment.