The inventor of Ethereum, Vitalik Buterin, gave an interview talking about the current state of the crypto market, its dynamics, and the impact of the crypto winter on developers. The second crypto by market cap has displayed a week with low volatility as it prepares to complete its migration to a Proof-of-Stake consensus with “The Merge”.
At the time of writing, Ethereum (ETH) trades at $1,610 and records a 3% profit in the last 24 hours and a 5% loss over the past week. Large cryptocurrencies have been moving sideways and might continue to see low volatility over the weekend.
Vitalik Buterin sat down with Noah Smith and addressed the current downside pressure in the crypto market. The inventor of Ethereum has been in the space for over a decade, almost as long as it has existed, and is familiar with its constant ups and down.
In that sense, Vitalik Buterin said that the crypto market crash was not a surprise. In the past, the price of larger cryptocurrencies trended upwards for “around 6 to 9 months” before crashing, according to Buterin.
This time the bull run extended for one and a half years, beating expectations and surprising everyone familiar with the crypto market dynamics. Unlike new participants, attracted by rising prices and profits, Buterin claims he was sure the “bull market will end”, but was unsure when. He added:
In that sense, the inventor of Ethereum confessed that he was a bit surprised about how long the last bull market lasted. However, he believes market participants might be “reading too much into what is ultimately cyclical dynamics”.
In other words, Buterin believes people might be trying to find a deeper meaning in the current price action, but crypto is trading following a historical cyclical pattern. As consequence, some projects in the space have been proven “unsustainable”.
This is the “good” or positive aspect of the crypto market’s cyclical dynamics, Buterin said referring to the collapse of the Terra ecosystem and those projects with a model unfit for bear markets. He added:
Over time, Ethereum, Bitcoin and other cryptocurrencies built for the long run might perform like gold or equities, Buterin believes. The current volatility in the sector comes from an “existential uncertainty”, as time goes by, people stop wondering about the future of crypto.
As this uncertainty clears, volatility in the crypto market reduces, but bull runs provide investors with diminishing returns. Buterin believes bull and bear markets exaggerate two different views: crypto is going to disappear versus crypto will take over the world’s finances.
The inventor of Ethereum believes a truth might be found in the middle ground. Buterin concluded:
Crypto Currency, its digital money.
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