Vitalik Buterin on the crypto crash: "Cryptocurrency has had its peaks and its lows"

Crypto markets are showing signs of recovery after a tough downward spiral last week, but they remain shaky. Even so, veterans in the space remain optimistic: One of them is Ethereum founder Vitalik Buterin . On Wednesday, Buterin told Fortune that cryptocurrencies have had ups and downs before and will have them again, and that "downturns are certainly challenging, although they are also often the times when the most meaningful projects are nurtured and built."

Ethereum fell below $1,000 last week, dropping to around $897 on Saturday. It has since recovered and is currently trading at around $1,149. It is down about 76% from its all-time high of $4,847 reached in November last year.

Buterin remains confident that the Ethereum ecosystem “will continue to become a more mature and successful blockchain ecosystem, ready to meet the hopes and dreams of millions of people in crypto over the next decade.”

As macroeconomic factors, including higher-than-expected inflation data in the U.S., set the stage for headwinds to come, the multi-billion-dollar collapse of the Terra ecosystem exposed weaknesses across the crypto industry, setting off a domino effect.

“The Luna debacle is in some ways one of these important, healthy moments in crypto, a reminder that the downside is real,” Buterin told Fortune in an interview in early June. “You can’t just build a system and then magically pretend that the downside will never happen.”

Buterin said there are “silver linings” to situations like these, “at least in my experience, you get to see how different people react and you get a better sense of their character and what kind of person they actually are as opposed to how they are in good times.”

On June 12, weeks after the TerraUSD stablecoin and its sister cryptocurrency Luna collapsed, Celsius Network, one of the largest lending platforms on the market, suspended withdrawals, sparking rumors of bankruptcy. This was followed by reports about the status of multi-billion dollar fund Three Arrows Capital, further fueling concerns about contagion and systemic risk.

Still, Buterin believes the benefits of the field outweigh the drawbacks. Others in the field share similar optimism.

Billionaire investor Mark Cuban recently told Fortune magazine that “disruptive applications and technologies released during a bear market, whether it’s stocks, cryptocurrencies or any business, will always find a market and succeed.”

“In both stocks and cryptocurrencies, you’re seeing companies that were propped up by cheap, easy money — but without a valid business outlook — disappear,” Cuban said. “As Buffett said, ‘When the tide goes out, you see who’s been swimming naked,’ ”

Sam Bankman-Fried , CEO of cryptocurrency exchange FTX , told Fortune magazine, “While this is going to be a really bad time for poorly built or less useful projects, it’s going to be less bad for valuable projects. I don’t think we’re going to see the industry die.”