thenewscrypto.com
- An extended stretch of unfavorable market conditions is a “crypto winter.”
- Buterin said he was still uncertain if markets had entered yet another winter stage.
According to Vitalik Buterin, who was speaking at the annual Ethereum (ETH) developer’s conference in Denver, Colorado, many in the cryptocurrency industry would welcome another bear market. While the lengthy periods of upward price movement make many people happy, “but it does also tend to invite a lot of very short-term speculative attention,” Buterin said in an interview with Bloomberg.
Disastrous Crypto Winter
An extended stretch of unfavorable market conditions is a “crypto winter,” in which digital assets are either sold or traded sideways. Before this, the crypto markets dropped by 88% from their high market capitalization of $830 billion in January 2018 to a low point of about $100 billion in December of that year, lasting for much of 2018 and 2019.
After the Bitcoin (BTC) halving event in mid-2020, the market thawed out for the first time in the following year. The market is gradually cooling down after hitting an all-time high in November with a total market valuation of a little over $3 trillion. They are now down around 38% from their high, so they might fall much farther if another crypto winter occurs. The whole market value might fall to roughly $400 billion if there is a recurrence of the 2018 drop.
However, according to Buterin, the cryptocurrency market seems to have changed from a small, specialist industry controlled by a few people to something that looks like a more popular financial sector. He said he was still uncertain if markets had entered yet another winter stage or were mimicking volatility in wider markets. Winters allow teams to concentrate on developing and screening out the bad initiatives; thus, markets need to adjust.