Bitcoin
The bitcoin price has fallen sharply since hitting a peak of almost $70,000 per bitcoin late last year. The ethereum price has also suffered an almighty crash with ethereum cofounder Vitalik Buterin issuing an urgent update warning in the run-up to ethereum’s major merge upgrade that begins next week.
Now, as the price of other top ten cryptocurrencies BNB
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Ethereum cofounder Vitalik Buterin has remained bullish on bitcoin even as he spearheads ethereum’s … [+]
“I was surprised that the crash did not happen earlier,” Buterin told economics writer Noah Smith in an interview.
The bitcoin, ethereum and crypto market has lost around $2 trillion in value since November last year, crashing along with stock markets as the Federal Reserve embarked on a monetary tightening program designed to leech some of the liquidity from the system that had built up over the covid-era of historically low interest rates and stimulus measures.
“In the medium-term future cryptocurrencies will settle down and be only about as volatile as gold or the stock market,” Buterin said. “The main question is just what level the prices will settle down at. In my view, a lot of the volatility early on had to do with existential uncertainty.”
Buterin pointed to the repeat price crashes bitcoin has suffered over the last ten years, predicting the “existential” questions being faced by bitcoin, ethereum and other cryptocurrencies “are going to become more and more settled.”
“The math nerd way of putting it would be: the price of crypto is stuck in a bounded range (between zero and all the world’s wealth), and crypto can only stay highly volatile within that range for so long until repeatedly buying high and selling low becomes a mathematically almost-surely-guaranteed winning arbitrage strategy,” Buterin said.
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The bitcoin price has fallen sharply this year, crashing 70% from around $70,000 per bitcoin and … [+]
Following the huge 2021 bitcoin, ethereum and crypto price bull run, cryptocurrencies have begun to seep into the mainstream, with adoption on Wall Street, from technology companies and countries—most notably El Salvador—with Buterin saying crypto “finally feels meaningfully useful.” As adoption increases, Buterin predicts the market will settle further.
“If, in 2040, cryptocurrency has made its way robustly into a few niches: it replaces gold’s store of value component, it becomes a sort of ‘Linux of finance,’ an always-available alternative financial layer that ends up being the backend of really important stuff but doesn’t quite take over from the mainstream, then the chance that it’s going to either disappear or take over the world completely in 2042 is going to be much smaller,” Buterin said, speaking just a week before ethereum’s long-awaited merge upgrade gets underway. “Individual events are going to have much less of a bearing on that possibility.”
Next week, ethereum will begin its transition from the energy-intensive proof-of-work consensus mechanism to the more power-efficient proof-of-stake with the bellatrix hard fork on Tuesday.
