Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?

The crypto selloff should offer more clarity on which projects are ‘long-term sustainable’.

| More on:
A young man has a look of alarm on his face as he turns to see the close up face of a brown grizzly bear that is draped over him as part of a large life-size bear skin rug he is wearing over his shoulders.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Ethereum price is down 59% from its 16 November record highs
  • Founder Vitalik Buterin has slipped from the billionaire's list amid his cryptocurrency losses
  • The bear market should shake out crypto speculators and tokens lacking long-term sustainable business models

The Ethereum (CRYPTO: ETH) price is up 3% since this time yesterday, currently trading for US$2,028 (AU$2,860).

That boost will surely be welcomed by holders of the world’s number two crypto by market cap. But the digital token has a long way to go before recouping the losses it’s posted over the past six months,

So far in 2022, the Ethereum price is down 46%. And it’s lost 59% since the 16 November all-time highs of US$4,892.

While many crypto investors will have lost money on the sharp selloff, which has mirrored the selloff in risk assets like high growth tech shares, only a few will have found themselves reduced to millionaire status from billionaire.

Ethereum price collapse knocks founder from billionaire’s list

The top dogs in the crypto world haven’t been immune to the big price drops.

In fact, the 59% Ethereum price fall since its highs saw Vitalik Buterin tweet, “I’m not a billionaire anymore,” on Friday.

The now 28-year-old Buterin first described the Ethereum blockchain in a 2013 whitepaper when he would have been a teenager. In 2014, he went on to co-found the crypto along with other backers.

As crypto prices soared, so too did Buterin’s wealth. The Age reports that his digital wallet contained US$1.5 billion worth of Ether in November when the token was trading near its highs.

Does Buterin still ‘welcome a bear market’?

In late February, when the Ethereum price had already tumbled from its record highs but was still trading around US$2,790, Buterin made news when he said many crypto professionals would “welcome a bear market“.

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…

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.

Despite the sharp retrace in the Ethereum price since February (or perhaps because of it), Buterin hasn’t given up on his project.

Following on his admission that he’s off the billionaire’s list, at least for now, he tweeted, “Note to trolls: no, ethereum was not a mistake.”

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

A bitcoin trader looks afraid and holds his hands to his mouth among graphics of red arrows pointing down
Cryptocurrencies

How did the price of crypto assets perform in June?

Here's what went on in the world of cryptocurrency last month...

Read more »

a close up of a woman's face looks skywards as she is showered in a sea of graphic symbols of gold and silver coins bearing the bitcoin logo.
Cryptocurrencies

Here’s what will impact the Bitcoin price in July: expert

Cryptos are likely to rise or fall in line with other risk assets in the month ahead.

Read more »

a man with his back facing the camera sits at a computer displaying a screen of code with an electric power contraption on the desk near him as he sits in concentration while appearing to mine cryptocurrency.
Cryptocurrencies

Ethereum price falls after hackers begin laundering $100 million bridge exploit

Crypto bridges enable the transfer of tokens between different blockchains, but can provide hackers with opportunities.

Read more »

A shiba inu dog lying on the sand at a beach.
Cryptocurrencies

What’s going on with the Dogecoin price?

The meme token received a fresh round of support from Elon Musk.

Read more »

A young woman lifts her glasses with one hand as she takes a closer look at the news that the US SEC is ready to label Bitcoin a commodity
Cryptocurrencies

What did the SEC just say about Bitcoin?

Commodities and securities face significantly different regulations in United States markets.

Read more »

A man sits at his computer with his head in his hands while his laptop screen displays a Bitcoin symbol and his desktop computer screen displays a steeply falling graph.
Cryptocurrencies

How crypto miners are squeezing the Bitcoin price

Higher-cost crypto miners could be out of pocket more than US$20,000 for every Bitcoin they mine.

Read more »

A green-caped superhero reveals their identity with a big dollar sign on their chest.
Bank Shares

ASX 200 bank ANZ turns to crypto for carbon credit settlement

The carbon trading market is forecast to grow as the world continues work to slash greenhouse gas emissions.

Read more »

A man sits wide-eyed at a desk with a laptop open and holds one hand to his forehead with an extremely worried look on his face as he reads news of the Bitcoin price falling today on his mobile phone
Cryptocurrencies

The Bitcoin price is struggling. When will cryptos see a bottom?

Crypto investors may need to wait for the US Federal Reserve to ease the pace of its tightening before the…

Read more »