Ethereum Creator Vitalik Buterin Says Crypto Price Crashes Like Terra’s (LUNA) Are Good for Crypto – Here’s Why

Ethereum (ETH) creator Vitalik Buterin suggests that a drop in cryptocurrency prices has benefits.

Buterin says in an interview with former Bloomberg Opinion columnist Noah Smith that the drop in prices is “good” for exposing the weaknesses.

“I think the price drops are useful in revealing problems that were always present from the beginning. Unsustainable business models tend to be successful during booms because everything is increasing, so the money that people have at their disposal is increasing and therefore things can be temporarily supported by a steady influx of new dollars. “

The creator of Ethereum says that the collapse of the native token of stablecoin issuer Terra (LUNA) is an example of a collapse in prices that exposes unsustainable business models.

“During accidents, as we have seen with Terra, this model no longer works. This is truer in extreme situations like high leverage and Ponzis (2017 veterans will remember “BIT-CONNE-EEE-ECT !!! ‘).

But it’s also true in more subtle ways, like how protocol development is easy to support during bull markets, but when prices plummet, often expanded teams are hard to support financially. “

The founder of the alleged Ponzi scheme, Bitconnect, was indicted in February of this year by a grand jury in a US court.

According to Buterin, the volatility of crypto assets will decline in the “medium-term future” to a level similar to that of traditional assets.

“I definitely think that in the medium term future cryptocurrencies will stabilize and will only be as volatile as gold or the stock market.”

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