The co-founder of Ethereum, Vitalik Buterin, believes that the volatility of the crypto market could gradually slow down and reach that of gold and stocks. However, he has not provided a definite price at which cryptocurrencies would stabilize.
Ethereum co-founder says crypto market volatility will stabilize
Buterin spoke in an interview with Noah Smith, saying he was surprised that the mark took so long to succumb to the ongoing bear market. He said that during the bull run, he was confident that prices would dip, but he did not know when it would happen.
Smith asked Vitalik if the current price movement was part of the Bitcoin adoption surge, where the price started to mimic stable assets such as gold. Buterin agreed that in the medium term, crypto prices would settle, and their volatility would be equal to stable assets such as gold and stocks.
He also said that more people understood the crypto market, adding that as it gains established use cases and its role in the market becomes obvious, market certainty would increase. However, in April this year, Buterin said that he did not expect crypto to replace traditional fiat currencies.
Buterin defends the Ethereum Merge
The Ethereum Merge is expected to happen on September 15. The Merge is a process that will transition Ethereum from a proof-of-work to a proof-of-stake consensus. Currently, both Bitcoin and Ethereum use the PoW consensus. There has been intense criticism of the Merge from Bitcoiners and Ethereum miners that will no longer receive mining incentives.
However, the Ethereum Foundation has defended the Merge saying that it will make the Ethereum blockchain more secure, scalable and efficient. However, Bitcoiners have continued to defend PoW to ensure the Bitcoin network remains fully decentralized and neutral.
Vitalik has also defended the Ethereum PoS transition saying that PoW was not environmental-friendly. He has also said that PoW is less secure than PoS. The high energy demands of PoW require that miners be incentivized with newly mined coins to secure the network.
In the case of Bitcoin, miners are rewarded with newly mined coins. However, Buterin says that as the subsidy of the Bitcoin block reduces with miners, Bitcoin mining sites will become dependent on the transaction fees to subsidize security.
However, the transaction fees charged on the Bitcoin network are lower compared to Ethereum. Therefore, miners might not maintain the network’s security without getting a subsidy, leaving the network vulnerable to attacks. He added that if the Bitcoin network were to be attacked, there would be more will to switch to PoS, but such a transition would be “painful.”
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