The blockchain fad seems to be fading off, and the growth in cryptocurrencies and blockchain may be nearing the ceiling, says famed Ethereum co-founder Vitalik Buterin. In an exclusive interview with Bloomberg during the Ethereum Industry Summit conference in Hong Kong, the closely followed cryptocurrency leader mentioned “The blockchain space is getting to the point where there’s a ceiling in sight.”
Increasing Cryto Awareness and Adoption Limiting Growth
Buterin attributed his thoughts to the increasing awareness about the blockchain technology and cryptocurrencies built on top of it. “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.”
While the rapid rise in crypto valuations over the first few years of their launch was a result of marketing and attempts to achieve wider adoption, that initial phase is now coming to a close, opines Buterin. The growth in the next phase will involve attempts to turn the awareness and interest into a deeper involvement by the common public. “Go from just people being interested to real applications of real economic activity,” he adds.
Ether, the second-largest virtual currency after Bitcoin, has been the worst performer among the top cryptocurrencies over the last week. It dropped 8.9 percent during evening ET time on Friday, and the fall continues on Monday morning with its market cap down to $1.459 billion as of writing, according to data available from Coinmarketcap.com. Owing to the widespread adoption of ether, its declining valuations are expected to have an industry-wide impact. For instance, many crypto startups that used the initial coin offerings (ICO) route to raise capital did so in the ether tokens. To cover the operational expenses, they may be forced to liquidate their ether holdings. (See also, Why Are Altcoins Falling Faster Than Bitcoin?)
Bloomberg further quotes an earlier forecast by Bloomberg Intelligence commodity strategist Mike McGlone who believes that ether may further tumble to a support level of $155 owing to rising competition, market volatility, and a maturing industry. Overall, the cryptocurrency market has seen a wipe-out of around $640 billion from its January peak valuations. The world’s most popular cryptocurrency Bitcoin has lost more than 50 percent year-to-date (YTD).
Ether was trading at the levels of $197 on Monday morning ET down around 3 per cent over the past 24-hour period, while Bitcoin was trading at $6,324 down around 1.3 percent over the same period. (See also, ETH's Buterin: Free Riders Crypto's Major Problem.)
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