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.
In fact, the 27-year-old co-creator of ethereum told CNN Business in an exclusive interview Tuesday morning he believed cryptocurrencies are in a bubble. He stressed, however, that it’s “notoriously hard to predict” when bubbles will pop. “It could have ended already,” Buterin said. “It could end months from now.” By Wednesday morning, ether, the in-house currency on the network Buterin invented, crashed below $1,900 — a staggering drop of more than 40% from Tuesday night, according to Coinbase. Ether rebounded to around $2,700 Thursday morning, but that’s still down sharply from the record high of $4,384 on May 11.
The nosedive may have cost Buterin, a Russian-Canadian programmer who dropped out of college, his newfound status as a crypto billionaire. The value of ether in Buterin’s closely watched public wallet stood at approximately $870 million Thursday morning, down from around $1.1 billion the morning before. Even though he’s just 27, Buterin is a veteran of these crypto boom-bust cycles, at least as much as anyone can be. “We’ve had at least three of these big crypto bubbles so far,” said Buterin, who co-founded Bitcoin Magazine in 2012. “And often enough, the reason the bubbles end up stopping is because some event happens that just makes it clear that the technology isn’t there yet.”
Buterin laid out his vision for ethereum in a 2013 white paper, and ethereum launched two years later. Today it’s the second-largest cryptocurrency, behind only bitcoin. Unlike bitcoin, which is viewed as “digital gold,” ethereum is a blockchain-based platform for developers to build and operate apps. It’s like the Android or iOS of the crypto space. In late 2017, Buterin published a tweet storm that questioned whether the crypto space had really earned its market valuation, which at the time had just surpassed half a trillion dollars. He noted how little had actually been accomplished and crypto prices soon tanked. Unlike then, Buterin is encouraged by the “huge” progress the technology and applications have made in recent years.