‘Cryptocurencies could drop to near-zero any time’: Ethereum founder Vitalik Buterin

Ethereum | Loss: $60 billion | ETH or ethereum started the year with a market cap over $74 billion. It touched a high of $135 billion in January. However, market-wide slump caused its value to reduce to slightly over $14 billion at the end of December.

Ethereum founder Vitalik Buterin has an advice for the investors in crypto assets. In a tweet, he said that cryptocurrencies are hyper-volatile and their valuation could drop to near-zero at any time in the future. He suggested that one should not invest more than one could afford to lose.

“Cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time,” Buterin said. “Don't put in more money than you can afford to lose. If you're trying to figure out where to store your life savings, traditional assets are still your safest bet.”

Buterin is not the first person to give such advice. A similar bugle was sounded by Berkshire Hathaway’s chairman Warren Buffet earlier this year. He had said that he could say it “with almost certainty that they (cryptocurrencies) will come to a bad ending.”

Earlier this month, valuation of cryptocurrencies had hit a new low, with Bitcoin dropping to USD 6,048 from a high of above USD 20,000 in December last year. More or less, all cryptocurrencies slumped as bears struck the market.

However, in the last couple of weeks, the cryptocurrencies have recovered with Bitcoin almost doubling its exchange price (from its February 5 price) on Wednesday’s early trade. At the time of reporting, it was trading at USD 10,980 level, according to CoinMarketCap.

Ether had also plunged to a low of USD 574 on February 6. Currently, the cryptocurrency is trading at above USD 880 level.

The cryptocurrency market has been hit by authorities across the world tightening its noose on the largely unregulated market. A flurry of hacks which collectively wiped billions off the market has also dented investors’ confidence in crypto assets. Last month, hackers stole over USD 500 million in the biggest such heist in the crypto universe.