The crypto winter is “only going to get worse” as the industry readjusts to a higher interest rate environment, according to the chief executive of blockchain firm Tezos.

When asked about the plunge in the price of almost all crypto assets this year, Kathleen Breitman said: “A lot of this was inflated on cheap money, and a lot of this was backed by basically, like, VCs trying to pump.”

“There was a lot of easy money going into the system and I think it was artificially stoking a number of different things, mainly valuations of these companies,” she told CNBC’s Karen Tso Wednesday at the Web Summit conference in Lisbon, Portugal.

Breitman cited NFT marketplace OpenSea, where trading volume slumped from $2.9 billion in September 2021 to $349 million in September 2022, according to data from Dune Analytics.

“Clearly there is a phenomenon that has kind of crested and gone away in a lot of these markets, but meanwhile they’re saddled with a $13 billion valuation,” Breitman said.

“So I think there’s a lot of cheap money that went in, valuations went super sky high, you had people scrambling to make those valuations justified in some form, usually through cheap tactics like yield farming, and now that the easy money’s gone away, all that’s left is we’re getting communities, I hope,” she continued.

“Crypto hasn’t been evaluated by that metric, and neither has technology in the last 10 years that we’ve had low interest rates,” Breitman told CNBC. “It remains to be seen, but basically I think what you’ll find is the things that are useful are going to thrive.”

“But that’s the small minority of crypto applications, whether people want to admit it or not.”