Ethereum Founder Says Days of ‘1,000-Times’ Gains in Crypto Are Over
Crypto Growth Nears ‘Ceiling,’ Ethereum Co-Founder Says
(Bloomberg) -- The days of explosive growth in the blockchain industry have likely come and gone now that the average person is aware of its existence, according to Vitalik Buterin, co-founder of Ethereum.
“The blockchain space is getting to the point where there’s a ceiling in sight,” Buterin said in a Sept. 8 interview with Bloomberg at the Ethereum Industry Summit conference in Hong Kong. “If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”
Growth in Bitcoin and other cryptocurrencies in the blockchain community through its first six or seven years was dependent on marketing and trying to get wider adoption, Buterin said.
“That strategy is getting close to hitting a dead end,” he said.
The next step will be getting people who are already interested in cryptocurrencies to be involved in a more in-depth way, Buterin said. “Go from just people being interested to real applications of real economic activity,” he said.
Jehan Chu, managing partner at blockchain investment and advisory company Kenetic Capital, said there may be opportunity for further growth in 2019 as cryptocurrency tokens continue to advance.
“There are deep reservoirs of value just waiting for the right trigger,” he said in a text message.
Ether, the cryptocurrency that fuels the Ethereum blockchain, has slumped more than 85 percent from its January high after a fresh bout of selling in digital assets over the weekend. The second-largest cryptocurrency lost 11 percent as of 9:10 a.m. New York time, slipping below $200. Ether is used as “gas” to pay for transactions on decentralized applications running on the Ethereum network.
Losses in Ether accelerated in August as some start-ups paid in the digital currency during their initial coin offerings cashed out to cover expenses, and on concern about broader price declines among virtual currencies, according to industry watchers. Bitcoin has dropped more than 50 percent this year while the market capitalization of digital assets tracked by CoinMarketCap.ccom has slumped to $197 billion, down about $640 billion from its January peak.
Last week, Ether and Bitcoin tumbled after a report said Goldman Sachs Group Inc. is suspending plans for a crypto trading desk. Goldman CFO Martin Chavez said the report was “fake news,” saying the bank never had a timeline for its project.
"I honestly don’t think this stuff matters much. There’s honestly a part of me that would be happier if institutional trading of cryptocurrencies did not happen at all for another five years," Buterin said. "Ultimately if all that cryptocurrency is, is this thing that millionaires keep buying and selling to each other, then what have we really accomplished?"
Ether may fall further to a support target of $155 as it faces increasing competition, market volatility and a maturing industry, according to a Sept. 7 forecast from Bloomberg Intelligence commodity strategist Mike McGlone. That’s still about a 2,000 percent advance from the end of 2016.
To contact the reporters on this story: Eric Lam in Hong Kong at elam87@bloomberg.net;Gregor Stuart Hunter in Hong Kong at ghunter21@bloomberg.net
To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Stanley James at sjames8@bloomberg.net, ;Dave Liedtka at dliedtka@bloomberg.net, Garfield Reynolds, Teo Chian Wei
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