In an interview with Yahoo Finance's Zack Guzman, Blockchain.com founder Peter Smith says that next year will be a more challenging one for crypto but that will reveal which projects are really delivering.

Video Transcript

ZACK GUZMAN: When you look ahead to next year and kind of the interest now shifting from maybe retail excitement over to institutional. And we were just talking earlier in the program about that and how important it is for some of the price action. What do you see shaping up there as institutions look past maybe just Bitcoin into some of these other projects?

PETER SMITH: Yeah, we're already having institutions look past even Ethereum. So we're seeing volume and flow that's outside Ethereum and Bitcoin and our institutional business today, which is really kind of interesting. And happened a lot faster than we thought it would. That is going to impact prices.

I think you're right. It's very hard to have lost money in crypto over the last year. Some people have managed to do it, but it's quite hard. And so we're going to get into a harder, more competitive environment, I think, over the next year. And that's actually going to be net good for the market because it's going to start separating the good from the bad.

Right now everything is trading very correlated. So you have this excitement in the space and that's trading up. And there might be slight divergences between this asset and that asset on any given day, but everything is generally trading up.

I think next year you're going to start to see the market really kind of narrow in on what projects are really delivering. What projects are really growing from an actual usage perspective rather than just an investment perspective? What's just a momentum machine, and what's real value that has real technical value? And I think that's the evolution in the market you're going to see next year is sort of a breakup in the correlation of this asset class.