Ethereum founder Buterin sees an opportunity in the impending crypto winter

• Vitalik Buterin: Crypto arrives in mainstream financial markets
• Etherum founder not committed to crypto winter
• Crypto winter could even help sustainable models

These are tough times for crypto investors: both Bitcoin and Ethereum, the two largest cybercurrencies by market cap, have lost nearly half their value since hitting new record highs in November 2021. Market participants – including the experts from UBS – are therefore already talking about an imminent crypto winter, in which prices will continue to fall and will not fully recover from it for years to come. The last time such a winter started was in 2017/18. At that time, for example, Bitcoin collapsed by 80 percent and took years to regain the old highs because many investors lost interest in digital assets.

Crypto market arrives in the mainstream

Vitalik Buterin, however, explained during an interview with “Bloomberg” that he himself is not yet sure whether a “crypto winter” has already begun. Rather, he also thinks it is possible that the crypto sector is merely reflecting the volatility of the broader markets: “It feels like a switch has been flipped in a way and the crypto market is no longer a niche product controlled by a niche group and by decoupled from traditional markets, instead it is increasingly behaving like a part of mainstream financial markets,” said the inventor of the world’s second-strongest cryptocurrency.

This view is increasingly spreading on the markets: For example, the experts from FSInsight have already noticed that Bitcoin and the broader crypto market are increasingly developing in step with tech stocks. Furthermore, in a report obtained by Decrypt, Bank of America stated that Bitcoin’s correlation with the broad-based US index S&P 500 rose to an all-time high in late January. And the Institute of Nuclear Physics of the Polish Academy of Sciences in Kraków was also able to determine an interaction between the crypto market and other financial markets in a statistical analysis.

Pros of a crypto winter

But even if a new crypto winter should come, Buterin is unimpressed by the prospect. He can also see something positive in this scenario: “Many of the people who are heavily involved in the crypto market, and especially those who are building something, welcome a bear market,” explained the Russian-born, who has lived in Canada since 2000. On Wall Street, a bear market is when an underlying asset is down at least 20 percent from its recent high.

“They welcome the bear market because while these long periods of sharply rising prices make many people happy, it also attracts a lot of very short-term speculation,” Buterin said. In fact, the boom that followed the last crypto winter created numerous crypto millionaires and even billionaires in some cases.

But many of these investors are only out for short-term profits and, unfortunately, market manipulations such as “pump and dump” are not uncommon, criticizes the 28-year-old, who is himself a crypto billionaire. “Winters are the time when a lot of such applications fall away and you can finally see which projects are actually sustainable in the long term – both in terms of their models and their teams and their people,” Buterin explained, adding that a crypto -Winter could help those projects focused on improving crypto technology.

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