Vitalik Buterin, co-founder of the Ethereum blockchain network, stated that the current decline in cryptocurrency prices, which has overshadowed investors and is currently referred to as a new "crypto winter," may actually benefit the world of digital assets. Buterin believes that "long-term investors, who are deeply involved in cryptocurrencies, share this view, and many welcome the current bear market." He thinks that the long bull market since 2020 brought many short-term investors, despite it being a prosperous time for the cryptocurrency industry.
This comes as cryptocurrency prices have dropped since they reached record levels in early November, with investors and speculators anticipating a decrease in the vast amounts of stimulus injected into economies and global markets following the COVID pandemic. The Bloomberg Galaxy Crypto Index has fallen about 45% from its all-time high, while Ethereum, the most widely used cryptocurrency, has declined by about 40% during the same period.
Buterin pointed to many scams that capitalized on the name of cryptocurrencies during previous bull runs, one of the famous schemes being known as "pump and dump," which is a form of securities fraud that involves artificially inflating the price of a particular asset owned by the scammer through misleading and false positive information in order to sell it at a higher price to victims, according to Bloomberg and as reported by Al Arabiya.net.
The 28-year-old crypto billionaire said, "Winter is the time when many of these applications fall off, and you can identify which projects are actually sustainable in the long term, as is the case with both their models and their teams and staff." However, Buterin, who stated he was "surprised" by how the market has moved since last year, is uncertain whether cryptocurrency has entered another winter or if the sector is reflecting fluctuations in the broader markets.
He added, "It seems as if the cryptocurrency markets are transitioning from being a niche group controlled by a very specialized set of participants, somewhat separate from traditional markets, to something that increasingly behaves like a part of mainstream financial markets." He also mentioned that the crypto winter, if one may use the term, could help those building projects in cryptocurrency focus on improving technology.
Buterin has shifted his focus to scaling Ethereum in recent years, as the popular blockchain has long faced criticism for slow and costly transactions. The Ethereum Foundation is leading the latest efforts to improve blockchain scalability with the most significant upgrades in Ethereum's history. Buterin stated, "When everyone tries to use the Ethereum blockchain again, we don't want them to find out once more that it is unable to accommodate them all, and certainly, there isn't enough space on the network for everyone right now."
