- Vitalik Buterin says crypto winters help developers focus on projects and not the speculation that dominates during bull markets’
- He said that weak projects are easily swept away by bear markets.
- Bitcoin and Ethereum suffered significant losses after hitting their peak in 2021.
Vitalik Buterin, co-founder of Ethereum, commented on the current market outlook. He noted in an interview with Bloomberg that a crypto winter would likely be “welcome” in the digital asset space.
“The people who are deep into crypto, and especially building things, a lot of them welcome a bear market,” he said.
According to him, many of these developers ‘welcome’ a crypto winter- a period where the markets experience a prolonged bearish run with crypto assets trading lower or sideways.
When weak projects are abandoned, bear markets occur
In a bull market, many people get excited by the “long periods of prices moving up by huge amounts,” he noted. However, even as many people enjoy the soaring markets, it tends “to invite a lot of very short-term speculative attention.”
Buterin spoke to Bloomberg about why a prolonged bear market could be a benefit for the digital space.
“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 Ethereum co-founder’s comments on projects fading away mirror similar observations across the crypto industry. After the 2017 bull markets and initial coin offerings (ICO) booms, there was a bear market in 2018, which saw assets tumble until a new bullmarket was established in 2020.
There were hundreds of projects which could have been launched to reap the benefits of the hype that sent the prices skyrocketing. However, most of them have since disappeared.
Buterin wasn’t categorical if the crypto market is indeed in a crypto winter already. His observations come as Bitcoin and Ethereum (ETH), which have led the wider crypto market to battle a severe drawdown from late last year, are being made.
During the annual ETHDenver conference, the crypto guru commented.