Vitalik Buterin, the ether ETH/USD Blockchain co-founder recently said that the fall in the price of crypto assets is suitable for the market as it will reveal weaknesses.
During a recent interviewsaid Buterin crypto falling prices are good for uncovering problems that were always there from the start.
He said that the collapse of the stablecoin issuer’s native token Terra LUNA/USD is a great example of price crashes exposing unsustainable business models.
“In crashes, as we saw with Terra, this model stops working. This is especially true in extreme situations like high leverage and Ponzis (2017 veterans will remember ‘BIT-CONNE-EEE-ECT!!!’),” he added.
Also read: Ethereum co-founder Vitalik Buterin says he’s no longer a billionaire
However, buterin said developing protocols is easy to sustain during bull markets, but when prices crash, the often newly expanded teams are financially difficult to sustain.
“Unsustainable business models tend to thrive during booms because everything is going up, so the money available to people is going up, and a constant influx of new dollars can prop things up temporarily,” Buterin said.
Buterin feels that the volatility of crypto Wealth will decline to levels similar to traditional investments in the “medium term future”.
“I think that in the medium term, cryptocurrencies will settle down and only be about as volatile as gold or the stock market,” he said.
Formerly Buterin said He expects crypto to be only as volatile as gold or the stock market over the next few decades.
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