Competition in the cryptocurrencies sector exists of course. But not one currency has interest of any sorts to openly lambast another. So what did Vitalik Buterin, the founder of Ethereum meant when he cautioned that Bitcoin may slump to near-zero levels.
The 24-year-old Russian boy prodigy certainly did not mean to ruffle feathers. He saw a chink in the armor and signalled it readily instead of sitting around and waiting for Bitcoin to tumble.
Mr Buterin reiterated a common piece of advice we have imparted onto you – only invest as much money as you are prepared to lose. He also signalled that investors may be better off investing in more traditional assets instead.
Mr Buterin did not target Bitcoin as exclusively as this account may suggest. In a Twitter post he cautioned that all cryptocurrencies are currently undergoing turbulence which cannot be reliably predicted.
Ethereum is one of the most substantial coins out there, with a total market valuation of $92.4 billion. Mr Buterin’s warning read as such:
“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”
Ethereum has had a staggering rise to salience. Comparing to the same time last year, the cryptocurrency has shot up significantly. It last valued at $13 last February and now it’s sitting at around $1,000, which is definitely not to be sneezed at.
And if you are a bit confused about the future of cryptocurrencies, that is just as well. Pretty much everyone is. Some investors have a much juicier stake committed so they have a somewhat vested interested in keeping an upbeat outlook about the industry.
Naturally, there are those who are genuinely as optimistic about the industry as their looks may suggest and there is hardly any shame in that.
Take for instance Bitcoin which went up 2000% in the shortest time and prompted people to start borrowing money on their livelihoods in order not to pass up on this great new bonanza.
But amid the ominous warnings of doomsayers, there is reason for concern. Serious governmental bodies such as Britain’s Financial Conduct Authority has been one of the institutions to warn against getting overly-cosy with Bitcoin.
Back to the investors bit. People who want to keep others investing in the sectors are usually the overly wealthy who have managed to amass solid amounts of cryptocurrency and now can afford to sway the market at a whim.
But Mr Buterin has hardly any interest in doing so himself. He knows that if Bitcoin crumbles, the same forces that lead to the flagship currency’s demise will ultimately take down Ethereum. If anything, his warning must be read as well-meant advice.