September 29, 2022

Ethereum co-founder Vitalik Buterin says crypto is ready for another winter

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The digital-asset world, according to Vitalik Buterin, co-founder of the Ethereum blockchain, may profit from the recent drop in coin values, which has frightened investors and is being dubbed “another crypto winter.”

“A lot of people who are deep into crypto, and especially constructing stuff, prefer a bear market,” Buterin said in a Bloomberg interview. “They embrace the bear market because when prices move up by such large amounts for such long periods of time, it obviously makes a lot of people happy, but it also tends to attract a lot of extremely short-term speculative attention.”

Cryptocurrency prices have fallen since reaching all-time highs in early November, as investors and speculators expect the large sums of stimulus pumped into nations and global markets in the aftermath of the Covid epidemic to be reduced. From its all-time high, the Bloomberg Galaxy Crypto Index is down around 45 percent. During the same time span, the native currency of the world’s most extensively used blockchain, Ether, has dropped by around 40%.

The sector has exploded since the last “crypto winter” in 2018. CoinGecko, a price tracking website, displays a whopping 12,588 tokens. The massive sums of money invested during the most recent crypto bull run may have produced a slew of overnight millionaires and billionaires, but one person’s profits in crypto are often another’s losses and agony. Pumps and dumps market manipulation tactics were frequently seen in crypto apps run by those who were solely interested in making short-term profits.

“A lot of those applications fall away throughout the winters, and you can see which initiatives are genuinely long-term sustainable, both in terms of their ideas and their teams and people,” the 28-year-old crypto billionaire explained.

Buterin, who described how the market has changed since last year as “surprising,” isn’t sure whether crypto has entered another winter or is simply replicating broader market volatility.

“It feels like the crypto markets are transitioning from being this niche group controlled by a very niche group of participants and relatively disconnected from traditional markets to something that behaves more and more like it is part of the mainstream financial markets,” he said on Feb. 12 from Denver.

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