Kraken CEO Arjun Sethi is warning of a short-term crypto bubble risk as Bitcoin hits new highs. Could 99% of tokens really fail?
Kraken CEO Arjun Sethi has sounded the alarm over a possible crypto bubble as digital asset valuations surge to record highs.
Speaking at the Fortune Brainstorm Tech conference in Park City, Utah, Sethi acknowledged that while crypto has shown strong long-term growth, short-term conditions tend to resemble bubbles.
Drivers of the current surge
“Are we in a bubble or not? If I look at the overall slope over 15 years, I would say no,” he said. “If you look at it quarter by quarter, the answer is yes, we get into those bubbles all the time.”
His comments come as Bitcoin has set multiple all-time highs for the year, and the total market cap of all cryptocurrencies recently broke above 4 trillion dollars.
The growth has been fueled by institutional adoption, new token launches and a wave of U.S. policy support for digital assets.
The recent rally in Bitcoin and the rest of the crypto market is likely due to several pro-crypto regulatory shifts under the Trump administration.
Meanwhile, major public listings from Circle and the crypto exchange Bullish have boosted market enthusiasm.
The stock market’s strength has also played a role. The S&P 500 reached new records this year, and crypto has closely tracked that performance.
For many investors, digital assets are moving in tandem with equities rather than independently.
This correlation has increased the rate of optimism but some analysts believe it has also inflated valuations.
Digital asset treasuries spark debate.
Supporters of digital asset treasuries argue that they give investors an easy way to gain exposure to crypto without buying tokens directly.
These companies hold assets like Bitcoin or Ethereum on their balance sheets and allow shareholders to indirectly benefit from rising prices.
Sceptics, however, say many of these firms are chasing hype.
List of tokens with treasury companies.
BTC, ETH, SOL, XRP, BNB, HYPE, SUI, TRX, ENA, LTC, TON, TAO.
The bubble is forming infront of your eyes.
— Kaizen (@KAIZ3NS) August 7, 2025
Critics warn that the model is unsustainable and could unravel quickly if crypto prices retreat. Recent declines in stock values support the view that enthusiasm may already be fading.
Barry Silbert’s outlook on the crypto bubble
On the same panel as Sethi, Digital Currency Group founder Barry Silbert offered a different perspective.
e agreed that much of the market is overheated but insisted that the general crypto asset class is not in a bubble.
“There’s a whole lot of crap in crypto right now, which is overvalued,” he said. “I think 99% of crypto is absolutely going to zero. But that asset class, the crypto asset class, is absolutely not in a bubble right now.”
Silbert’s comments show the ongoing divide among industry leaders. While he expects most tokens to collapse, he believes that established assets like Bitcoin and Ethereum will endure and even grow stronger after weaker projects disappear.
A Historical pattern of crypto bubbles and crashes
Crypto’s history supports both optimism and worry. Since Bitcoin’s launch in 2009, the market has gone through multiple booms and busts.
Prices have surged to astonishing highs, only to drop by more than 70% in subsequent crashes.
Each cycle has attracted new participants and flushed out weaker projects. Over time, however, the overall trend has been upward with Bitcoin reaching higher peaks after each downturn.
This track record makes it difficult to assess whether the current rally is a dangerous bubble or simply another phase in crypto’s growth.
