Founder of the popular cryptocurrency TRON, Justin Sun discusses the current downturn in the price of cryptocurrencies worldwide and examines some of the effects that has had on the larger industry. Sun joined Yahoo Finance Live on July 27, 2022.
JUSTIN SUN: Recent crypto downturn really destroyed lots of the balance sheet of crypto enterprise. I think while the biggest reason is because all the platforms use a very big leverage in their daily operation. So that's why when Bitcoin, Ethereum goes down, for example, 20%, like 30%, for those companies that have used a very large leverage, it probably means even 50%, even 70% down.
So a lot of the assets are liquidated. That's why we have seen even like big companies with $10 billion in their balance sheet even get liquidated in a very short period of time, probably like around two to three weeks, just like what happened in the financial crisis.