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Crypto Market: Ethereum Co-founder Says Crash First, Then Consolidation

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The "unrealistic" alternative cryptocurrencies that have come out in recent weeks amid the hype created by crypto major bitcoin will lead the market to crash, according to Ethereum co-founder Charles Hoskinson. But, it will strengthen again after the failure of many of those bitcoin alternatives that lack substance, he added.

In an interview with CNBC, Hoskinson, Ethereum's former CEO who now runs blockchain research firm IOHK, warned investors to be cautious about the currency they are buying.

In recent weeks, many alternative cryptocurrencies, including Cardano, a cryptocurrency overseen by Hoskinson's company, have rallied substantially as the digital currency boom is growing further.

Dogecoin, a meme-inspired cryptocurrency, saw its market value increase to $2 billion on Sunday, just days after reaching $1 billion. According to Coinmarketcap data, dentacoin, a dental care-focused digital currency, briefly surpassed $2 billion in market capitalization on Sunday.

Hoskinson said, "My personal opinion is that we're going to see a consolidation after a crash."

"What's going to occur is a lot of these ventures that don't have strong fundamentals, don't have good tech, or just unrealistic projects, they will eventually run into some major wall they can't quite overcome. They will fracture up and you will see a lot of them are certain to fail," he said.

At the same time, he added that many of these new ones may not fail anytime soon as they have strong funding to sustain.

"The problem is a lot of them have a lot of money. It's really hard to fail when your burn rate is $5 million or $10 million a year, and you have $1 billion of capital," according to Hoskinson.

Ethereum, which develops the underlying technology for the cryptocurrency ether, also known as ethereum, was the second major crypto currency for long, but was temporarily overtaken by Ripple in December.

Meanwhile, Dogecoin's founder Jackson Palmer reportedly shared his concerns about the high valuation of the project that hasn't released a software update in more than two years.

"I have a lot of faith in the Dogecoin Core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over two years has $1 billion market," he said on Twitter.

At CoinDesk, ethereum is at $1,305.26, up 0.63 percent, with market cap of $126 billion; Ripple is at $1.98, down 6.25 percent with market cap of $76.85 billion; and Bitcoin is down 4.16 percent to $13,838.78, with market cap of $232 billion.

by RTTNews Staff Writer

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