Ethereum co-founder “welcomes” crypto winter
Vitalik Buterin says he welcomes the drop in “very short-term speculative attention”
Ethereum’s co-founder has welcomed the apparent onset of a ‘crypto winter’, outlining the possible long-term benefits afforded by the recent decline in cryptocurrency values.
Speaking to Bloomberg, Vitalik Buterin mused that, “People who are deep into crypto, and especially building things… a lot of them welcome a bear market”.
Crypto market correction
Ethereum has lost 45.1% of its value in the three months since its $4,891 all-time high. Having reached as high as $569bn, the cryptocurrency’s market capitalisation currently stands at $320.8bn.
Having long-played second fiddle to bitcoin, ether enjoyed significant growth in 2020 and 2021 as interest in smart contracts, decentralised finance (DeFi) and non-fungible tokens (NFTs) mounted.
The capitalisation of the total cryptocurrency market has fallen from a high of almost $3trn in November to $1.75trn as of February 21.
Buterin stikes positive tone
Buterin, who co-founded Bitcoin Magazine in 2012 and co-created Ethereum in 2013 aged 19, might have been expected to lament or even resent the substantial correction in his net worth.
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Instead, he maintained that a bear market could be welcomed, “because when there are these long periods of prices moving up by huge amounts – it does obviously make a lot of people happy, but it does also tend to invite a lot of very short-term speculative attention”.
Buterin also said that a bearish market phase could ultimately result in better cryptocurrency and blockchain-related projects, as more focus is put on improving the technology at such times.
This increased focus could possibly be to Ethereum and Buterin’s detriment, however. The past 12 months have seen the emergence of a number of projects that could dethrone Ethereum as the foremost blockchain network in the DeFi and NFT space.
Indeed, Morgan Stanley recently highlighted high fees and inadequate scalability as possible hindrances to Ethereum’s future growth. The investment bank added that should Ethereum fail to resolve such problems, it could find itself supplanted by the likes of Solana, Cardano, Tezos and BNB Chain.