The Ethereum (CRYPTO: ETH) price is down 4% over the past 24 hours, currently trading for US$2,631 (AU$3,682).
That sees the world's number 2 crypto by market cap, shed 31% of its value so far in the new year.
And it gets worse. The Ethereum price is now down 46% from its all-time 16 November highs of US$4,892, according to data from CoinMarketCap.
But it's not just Ether that's fallen hard this year and plummeted from 2021's record highs.
Year-to-date, all 20 of the top cryptos by market valuation are deep in the red, in an event being dubbed a new 'crypto winter'.
Image source: Getty Images
Is the crypto winter good for the Ethereum price longer term?
For investors who bought Ether in recent months, watching the Ethereum price spiral lower is unlikely to be perceived as a good thing.
Yet Vitalik Buterin, co-founder of the Ethereum blockchain, points to the longer-term benefits of the big pull back in cryptos.
According to Buterin (quoted by Bloomberg):
The people who are deep into crypto, and especially building things, a lot of them welcome a bear market. They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does – it does obviously make a lot of people happy – but it does also tend to invite a lot of very short-term speculative attention.
With the Ethereum price down by almost half since November, and in a case of what could be the crypto cream rising to the top, Buterin said, "The winters are the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people."
Cryptos moving in step with risk assets
The falling Ethereum price and losses among other cryptos are in line with the selloff witnessed among tech shares and other high risk assets.
According to Buterin:
It does feel like the crypto markets kind of flip the switch from being this niche group that's controlled by a very niche group of participants and it's fairly disconnected to traditional markets into something that behaves more and more like it is part of the mainstream financial markets
