Vitalik Buterin: Developers Would ‘Welcome’ Another Crypto Winter

Speaking at the annual Ethereum (ETH) developers conference in Denver, Colorado, Vitalik Buterin said that many of the people that are building things in the crypto space would welcome another bear market.

“The people who are deep into crypto, and especially building things, a lot of them welcome a bear market”

Buterin spoke to Bloomberg, adding that the prolonged periods of upwards price movement makes a lot of people very happy, “but it does also tend to invite a lot of very short-term speculative attention.”

Another Crypto Winter?

A crypto winter refers to a prolonged period of bearish markets where digital assets are sold off or traded sideways. The previous one lasted for most of 2018 and 2019 when crypto markets dumped 88% from their January 2018 market capitalization peak of $830 billion to bottom out at around $100 billion in December of the same year.

The following year saw very little action on markets and they only started to seriously thaw from that winter in mid-2020 after the Bitcoin (BTC) halving event.

Today, markets are currently cooling off from their November total market cap all-time high of a little over $3 trillion. They have currently declined around 38% from that peak so there could be a lot further to fall should another crypto winter ensue. A similar massive slump like the one that occurred in 2018 could send total market capitalization crashing to around $400 billion.

Buterin commented that crypto does appear to have flipped a switch from being a niche market controlled by a small group to something that resembles a more mainstream traditional financial market. On the premise of another winter, he added:

“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”

He still wasn’t sure whether markets had entered another winter stage yet or were just mirroring volatility in broader markets. Markets need to correct and the winters give teams time to focus on building, they also weed out the weak projects and only the strong tend to survive.

Cryptocurrency Markets Today

Crypto asset markets have fallen back again over the weekend. Total capitalization fell to just over $1.8 trillion as Bitcoin and Ethereum registered losses. There has been a slight uptick during the Monday morning Asian trading session, but the overall trend over the past couple of weeks has been range-bound to bearish as the major tokens fail to break through resistance levels.