Ethereum blockchain co-founder and prominent leader in cryptocurrency Vitalik Buterin said that investors might be experiencing a “crypto winter,” but it’s not all bad news for them. As prices remain low, it could be a catalyst for a second digital asset universe. This would allow investors to reap the benefits of significant growth potential once things get back on track.
Interview with BloombergButerin stated:
People who love crypto and make things are happy for the bear markets. They welcome the bear market because when prices go up so much in the long run – it’s obviously a lot of people rejoice – but it invites a very short period of time. You should pay speculative attention.
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Following an unprecedented peak in early November, cryptocurrency markets plunged. Owing to investors’ and speculators’ expectations of positive economic news coming out of Covid. The Bloomberg Galaxy Crypto Index dropped by 45%, while Ether fell 40% from its peak.
Many people are seeing their wealth increase in tandem with the rise of prices. CoinGecko is tracking 12,588 different tokens and reminds us all that this isn’t just a bull market. It’s been one for cryptocurrency as well. If you use this market incorrectly, or blindly follow sheep-like leaders, fraud and manipulation can be devastating. You can also get rich quickly by following someone who doesn’t know what they’re doing.
Pumps & Dumps occur when traders try to gain money off others’ losses by pumping up prices before selling off at lower levels, creating fear amongst investors who think it might happen again soon, thus driving them towards safety.
Opportunities for Crypto Winters
According to a crypto billionaire aged 28,
These applications are most popular in winter. You can then see which projects will be long-term viable, as shown by their models, teams, and people.
The crypto winter maybe just a seasonal chill for this emerging industry, but Ethereum founder Vitalik Buterin told Bloomberg that he was “surprised” by the market’s move over last year. Buterin isn’t sure whether the crypto market will continue to experience volatility or just a second winter.
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On February 12, 2012, he spoke out in Denver.
It seems that crypto markets flip the switches when they are controlled by one particular group. It’s completely different from traditional financial markets which act more like they are part of mainstream financial markets.
Buterin stated that Crypto Winter was an opportunity to make significant positive changes.
The dangers of using cross-blockchain bridges were brought to light this year when Wormhole’s popular crypto protocol was hacked for more than 300 million dollars. Buterin cautioned in January that such bridges can be very dangerous. It may cause users’ funds to be trapped in Smart Agreements without their knowledge or consent. Programs known as Smart Agreements are programs which issue parallel cryptocurrency on two blockchains.
Buterin’s Focus on Ethereum Scaling
Ethereum is working hard to speed up its blockchain and make it more scalable. Investors frequently criticize Ethereum’s popular blockchain for slow transactions and high costs due to limitations in its technology. However, efforts are being made to improve this ecosystem.
Buterin finally added
When everyone tries to use blockchain again, no, in fact, we don’t want everyone to find out again that there isn’t enough space on the chain for everyone.
Featured Image from Pixabay. Chart by TradingView.com