Ethereum co-founder: Crypto ‘needs time to mature’

Vitalik Buterin admits he is ‘kinda happy’ that several crypto-focused ETFs have been postponed

Ethereum co-founder Vitalik Buterin -

Ethereum’s co-founder, Vitalik Buterin, has said the crypto sector should not be chasing big financial corporations for investment money..

The 28-year old billionaire said: “I don't think we should be enthusiastically pursuing large institutional capital at full speed.”

Buterin said he was “kinda happy” that several crypto-themed exchange-traded funds have been delayed in recent months and argued that the sector “needs time to mature before we get even more attention.” 

In the past month, crypto-focused firms such as Bitwise and 21Shares have continued to expand their exchange-traded product (ETP) offerings, with the latter recently launching Dubai’s first physically-backed Bitcoin ETP. 

Elsewhere in the crypto sector, the world’s leading asset managers, BlackRock and Fidelity, have continued to grow the sections of their workforces devoted to digital assets.

However, the shock of last year’s “crypto winter”, in which more than $2trn was wiped off the value of the total cryptocurrency market, continues to be felt.

In addition to mass redundancies, an exodus of executives from prominent companies and a wave of bankruptcies, leading financial institutions have started to think twice about the once-burgeoning sector. 

Buterin’s latest comments echo those he made in February when he admitted that many crypto developers “welcome a bear market”. He argued that sustained bull markets “invite a lot of very short-term speculative attention” and discourage focus on developing better products. 

Eight months later Buterin said: “I'm actually kinda happy a lot of the ETFs are getting delayed. The ecosystem needs time to mature before we get even more attention.”

Regulation suggestions

Talking about future crypto asset regulation, Buterin said that requiring more “know your customer” (KYC) measures for decentralised finance (DeFi) projects would not stop hackers and would only “annoy users”. 

Instead he suggested that regulators could improve DeFi projects by imposing limits on leverage; requiring auditing transparency; and using knowledge-based tests instead of minimum net-worth rules to control usage. 

A recent national poll carried out by the industry-backed Crypto Council for Innovation found that 52% of Americans want more cryptocurrency regulation. 

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