The cryptocurrency market has been underperforming over the past few months, but there might be some benefits to it.
Ethereum co-founder Vitalik Buterin believes that the recent decline in the prices of cryptocurrencies could benefit the broader crypto market.
Buterin stated that most people welcome the bear market, especially people who are deeply involved in the cryptocurrency market. He said;
“They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does — it does obviously make a lot of people happy — but it does also tend to invite a lot of very short-term speculative attention.”
The Ethereum co-founder added that crypto winter is when the applications of most projects fall away, and users can see which projects are sustainable in the long term. He said;
“Most applications fall away during cryptocurrency winter, and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people.”
The last cryptocurrency winter occurred in 2018, with Bitcoin losing more than 50% of its values during that period.
Vitalik Buterin stated that he didn’t expect the cryptocurrency market to perform the way it did last year. However, he added that he is not sure whether crypto will enter another winter or whether it’s just more volatility.
The broader cryptocurrency market has been underperforming over the past few months. The total cryptocurrency market cap reached an all-time high of $3 trillion in November 2021.
However, it has declined by more than 40% since then and currently stands at around $1.7 trillion.
Bitcoin, the leading cryptocurrency, has lost more than 40% of its value and currently trades around $37k per coin. The decline doesn’t apply only to Bitcoin, with Ether, Binance Coin (BNB), Cardano, Solana and LUNA all losing more than 45% of their values in recent months.