Vitalik Buterin warns of market bubble and doubts Bitcoin’s primacy

Bitcoin must develop its technological base to improve energy efficiency, otherwise digital gold risks falling behind, co-founder of Ethereum Vitalik Buterin said in an interview with CNN.

The crypto crash of the past few days has shocked investors around the world.

Vitalik Buterin isn’t among them — even though the meltdown wiped out a huge chunk of his personal wealth. https://t.co/TkPlysfuNo pic.twitter.com/yuxxsPrsLB

— CNN (@CNN) May 20, 2021

In his view, there is a possibility that the first and second cryptocurrencies may eventually swap places. Ethereum is moving to a more eco-friendly Proof-of-Stake consensus algorithm, which will significantly reduce energy consumption.

Regarding environmental concerns around Bitcoin, which runs on Proof-of-Work, he said:

\”I really think these concerns are real. Resource consumption is undoubtedly enormous. This is not the thing that will destroy the world by itself, but its substantial negative impact is obvious.\”

The current market conditions for digital assets, Buterin described as a bubble. He noted that it is difficult to predict when it will burst.

\”We have had at least three major cryptocurrency bubbles so far. Quite often, the reason bubbles burst is the event that makes it clear that the technology is not yet ready,\” he added.

He also admitted that the crypto industry is \”vulnerable\” to external triggers, notably Elon Musk’s tweets. However, he believes that over time an \”immune system\” will form.

\”His Twitter — this is something the industry faced literally last year. I think it’s reasonable to expect a bit of madness. But I really believe that markets will learn. Elon won’t have influence forever,\” he added.

Tesla founder criticised Bitcoin for centralisation and said that it is too dependent on mining companies.

On May 20, Musk posted on his page a post with a photograph of a dollar bill bearing the Dogecoin logo and the words \”Cyber Viking\”. After this the asset rose by more than 20%.

Earlier, in early May, Ethereum’s rise above $3,000 pushed Buterin into billionaire status. Due to the market crash, he lost that status — his wealth fell to $850 million.