No more explosive growth in crypto market says Buterin
Vitalik Buterin, co-founder of the Ethereum Foundation, said this weekend that there was little chance of another growth explosion in the cryptocurrency sector.
In an interview with Bloomberg at the Ethereum Industry Summit conference in Hong Kong, Buterin said that in the first few years growth in cyrptocurrencies and blockchain was reliant on marketing and other efforts to gain wider adoption.
“That strategy is getting close to hitting and end,” Buterin claimed.
he added: “The blockchain space is getting to the point where there’s a ceiling in sight.
In December 2017 and January this year, most cryptocurrencies enjoyed a rapid price spurt: among them, bitcoin, the biggest cryptocurrency by market capitalisation, rose more than 200% in one month to its near $20,000 high in December; second-largest token ether rose nearly 230% in just over a month to its $1,423 January high.
“If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”
Some crypto growth funds have been established this year to capitalise on what their managers believed would be another massive growth spurt in cryptocurrency prices.
This was largely predicated on the swift adoption of crypto asset trading by institutional players bringing in further retail investors.
Among such funds is the 10x Growth Account, which markets the managers’ belief that crypto assets could mount another explosive rally that drives their value higher by more than tenfold.
Since hitting highs in December and January, however, many cryptocurrencies have fallen sharply and remain painfully lower than where they were at the start of the year. Ether, the coin that backs the Ethereum network, has slumped around 85% since its January high.
And the institutional investors haven’t turned up in the numbers that would be needed to launch a strong, liquidity-driven, rally. Last week, many crypto assets fell sharply on rumours – later denied – that Goldman Sachs was abandoning plans for a digital asset trading desk.
Buterin responded to the market’s response: “I honestly don’t think this stuff matters much.”
He added: “There’s honestly a part of me that would be happier if institutional trading of cryptocurrencies did not happen at all for another five years. Ultimately if all that cryptocurrency is, is this thing that millionaires keep buying and selling to each other, then what have we really accomplished?