Unusual: The creator of Ethereum (ETH) explains why “Price falls are beneficial” for the crypto-currency sector!

In a recent interview with former Bloomberg Opinion columnist Noah Smith, Vitalik Buterin, co-founder of the Ethereum Foundation, explained one thing that is good in bear markets. crypto.

During this interview, regarding the cryptocurrency market crash that began in November 2021, Vitalik had this to say:

“I was actually surprised the crash didn’t happen sooner. Normally, crypto bubbles last around 6-9 months after breaking above the previous high, after which the rapid drop comes quite quickly. This time around, the bull market lasted almost a year and a half…

“I think the price cuts help expose issues that were there from the start. Unsustainable business models tend to succeed during boom times, because everything goes up, the money people have goes up, and things can be temporarily supported by a constant influx of new dollars.

“During crashes, as we have seen with Terra, this model no longer works. This is especially true in extreme situations, like high leverage and ponzis…but it’s also true in more subtle ways, like how easy protocol development is to sustain during bull markets, but when prices plummet, often newly expanded teams are difficult to sustain financially. I don’t claim to have a cure for this dynamic, other than my usual advice that people need to remember space history and take a long view of things. »

As for his medium to long-term outlook for the cryptocurrency market, Vitalik said:

“I definitely think in the medium term cryptocurrencies will stabilize and only be about as volatile as gold or the stock market. »

The creator of Ethereum ($ETH) explains why “price declines are good” for the cryptocurrency industry.

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Thomas E.
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