Why Vitalik Buterin Expected Crypto Crash To Happen Earlier, ETH Price Battles With $1,600
September 02 2022 - 09:25AM
NEWSBTC
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”. Related Reading: Bear Market Who? Data Shows High
Conviction In BTC And ETH 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: When the prices
are rising, lots of people say that it’s the new paradigm and the
future, and when prices are falling people say that it’s doomed and
fundamentally flawed. The reality is always a more complicated
picture somewhere between the two extremes. 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”. Can Ethereum Take Over “All The World’s
Wealth”, Vitalik Buterin Replies 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: I don’t claim to have a cure for
these dynamics, except my usual advice that people should remember
the history of the space and take the long view of things. 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. Related Reading:
Binance Coin Eyes $316, After Being Stuck At $276 In The Last Week
The inventor of Ethereum believes a truth might be found in the
middle ground. Buterin concluded: The math nerd way of putting it
would be: the price of crypto is stuck in a bounded range (between
zero and all the world’s wealth), and crypto can only stay highly
volatile within that range for so long until repeatedly buying high
and selling low becomes a mathematically almost-surely-guaranteed
winning arbitrage strategy.
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