Jonathon Miller

NFTs will be ‘as disruptive’ as Bitcoin was 10 years ago — Kraken exec

Jonathon Miller, managing director of cryptocurrency exchange Kraken in Australia, says despite NFT volumes plunging, the company remains “bullish on the NFT space.”

Nonfungible token (NFT) trading volumes may have dropped nearly 98% since January, but several industry executives tell Cointelegraph that it’s nothing to fear as the technology continues to develop and mature.

Jonathon Miller, managing director of cryptocurrency exchange Kraken in Australia, said “despite NFT market activity and sales volume having slowed down in September, we are still seeing positive adoption signals at an institutional level and continued growth in use cases.”

He told Cointelegraph that the company remains “bullish on the NFT space” and believes it will be “just as disruptive and innovative as Bitcoin was 10 years ago.” Moreover, he said he was particularly intrigued by JPMorgan signing “a lease using the technology” as well as hearing the news that “the Vatican has opened an NFT gallery.”

He, however, acknowledged that the NFT industry is still “in its infancy” and that the biggest barrier to mass adoption is “nightmare user experiences,” saying that it is “very hard to say to someone who wants digital art, that you have to install a wallet and you have to onboard with that exchange.”

The Kraken executive said it has been a priority for them to make that process smoother.

John Stefanidis, CEO and founder of NFT gaming platform Balthazar DAO, told Cointelegraph that the trading downfall is not significant in the grand scheme of NFTs as people need to understand that “NFTs are more than just photos.”

Stefanidis said it’s natural for this decline to happen after “something has experienced extreme growth under one application.”

He believes this has the potential to stabilize the market more, saying that “whenever there is horizontal growth, people diversify and pull back, and we’re going to see a more gradual growth in NFTs.”

Mason Edwards, chief commercial officer of Tezos Foundation — an organization focused on promoting and developing the Tezos blockchain and related technologies — told Cointelegraph that it’s “beneficial the market has shaken out a bit, people will buy things they care about, rather than speculation,” noting:

“We’re still not at a point of maturity in the NFT market, we’re still going to see people buy a rock for a million dollars.”

Contagion only hit firms with ‘poor balance sheet management’ — Kraken Aus boss

The crypto contagion only hurt entities that poorly managed their treasuries, but didn’t affect the underlying blockchain technology, he said.

The crypto contagion sparked by Terra’s infamous implosion this year only spread to companies and protocols with “poor balance sheet management” and not the underlying blockchain technology, says Kraken Australia’s managing director Jonathon Miller.

Speaking with Cointelegraph, the Australian crypto exchange head argued that sectors such as Ethereum-based decentralized finance (DeFi) revealed its fundamental strength this year by weathering severe market conditions:

“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.”

“Platforms like Ethereum did not fail when the volatility hit. You saw decentralized markets, decentralized 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,” he added.

Miller’s comment comes despite CoinGecko reporting a 74.6% market cap decline in DeFi during Q2 2022 following the collapse of Terra and a rise in DeFi exploits. Though the crypto data aggregator also noted that the industry managed to retain most of its daily active users.

Miller also added that blockchain projects only ran into issues when the design of their underlying protocols was “obviously poor,” such as the case of Terra’s algorithmic stablecoin TerraUSD Classic (USTC).

“I think that’s a trade off. There’s a Treasury management problem, not a blockchain problem,” he said.

Questioned about how Kraken fared through the crypto bear market this year, Miller suggested the company was well primed to deal with the volatility. He noted that the company has survived many downturns in its 11-year history and notably didn’t blow a lot of money on marketing during the bull run last year.

“We’re in a slightly different position as perhaps 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,” he explained.

Miller was also optimistic about the current state of the Australian crypto sector, stating that there are a lot of “bullish underlying signals from businesses who are still building products.”

He pointed to major banks such as ANZ recently testing the use of its own stablecoin on Ethereum and major payments giants such as Mastercard joining the Blockchain Australia Association, signaling strong “intent to become involved in crypto and blockchain.”

“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.”