Financial and Technology News

Crypto’s rise nears ‘ceiling,’ ethereum cofounder says

 2018/11/08
The days of explosive growth in the blockchain industry have likely come and gone now that the average person is aware of its existence, ethereum cofounder Vitalik Buterin said.
 
“The blockchain space is getting to the point where there’s a ceiling in sight,” Buterin said in an interview with Bloomberg on Saturday 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 might be opportunity for further growth next year 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 a January high this year and now trades at less than US$200 after a fresh round of selling alongside rival coins, including ripple and litecoin, on Saturday, according to Bitstamp exchange pricing compiled by Bloomberg.
 
Ether is used as “gas” to pay for transactions on decentralized applications running on the ethereum network.
 
Losses in ether last month accelerated 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 is down more than 50 percent this year.
 
Last week, ether and bitcoin tumbled after a report said Goldman Sachs Group Inc is suspending plans for a crypto trading desk.
 
Goldman Sachs chief financial officer Martin Chavez said the report was “fake news,” saying the bank never had a timeline for its project.
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