Ethereum Founder Explains ‘Crypto Winter’ Upside

Ethereum founder Vitalik Buterin said the digital asset universe could see some benefits from the falling coin prices, Bloomberg writes.

The declining prices accompany a reduced interest in investment in the coins, referred to as a “crypto winter.” The prices have been falling since November, when crypto hit an all-time high in terms of price.

According to investors and speculators, one influencing factor might be the reduction in the massive stimulus that happened because of the pandemic.

Buterin said a lot of people “welcome a bear market,” including the people who are deep in crypto and who are building things.

“They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does — it does obviously make a lot of people happy — but it does also tend to invite a lot of very short-term speculative attention.”

Buterin said the winters are “the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people.”

The last crypto winter took place in 2018, and since then, the sector has been booming — price tracking site CoinGecko lists 12,588 tokens, which is a huge amount. Crypto investments may have made numerous “overnight millionaire or billionaire” stories, though the fluctuations could also have caused losses for others.

Buterin did say he’s surprised by how the market has moved in the last year. He said he’s not sure whether crypto will enter another winter or whether it’s just more volatility.

Stephen Pair, CEO of BitPay, the crypto payments processor, thinks that bitcoin ownership will become more ubiquitous, which will lead to more people using it for making payments.

See also: Bitcoin’s Future as a Payments Tool Is Bright, Says BitPay CEO

That viewpoint isn’t so widely held, especially after the November crash wiped out around half of bitcoin’s value. But Pair is sticking to it.

“I think a lot of people will use it as a payment mechanism,” Pair told PYMNTS’ Karen Webster recently, adding that current users tend to be price-sensitive. “When the price is down, they tend to not spend it. When the price is higher than they do spend it. And the same is true of the other volatile cryptocurrencies.”