Ethereum is a cryptocurrency network that offers a new currency called Ether to the crypto market.Having similar blockchain-based roots as Bitcoin, it works the same as other crypto coins.Ethereum is also the second-largest cryptocurrency after bitcoin. Recently, the crypto market has experienced massive turbulence that has resulted in the speeding decline of Ethereum. The greatest failure Ethereum has experienced is dropping in ranking order concerning market capitalization.
According to experts, ETH’s drop has been considered one of the worst declines in the history of the cryptocurrency market. Statistics show that, at the beginning of 2018, ETH was trading around $800, then dropped drastically to $200, and at the moment, it is at $180. Furthermore, currently, stats show that BTC is taking 70 percent of the trading volume as opposed to the previous years where BTC and ETH had an equal share of the trading volume.
A Brief Breakdown of Ethereum History
· In the last 12 months, Ethereum has lost 30.7 percent.
· Over the past two years, Ethereum has acquired 35 percent.
The Performance Of Ethereum In 2017/2018
· In 2017, Ethereum Gained 7785 percent.
· In 2018, Ethereum lost 84.8 percent.
Why Ethereum Is Falling
According to recent statistics, Ethereum had dropped by 13 percent and gained around 0.53 percent. The report shows that the price of Ethereum had decreased by 93 percent since its all-time highest rate. Experts cite that the two primary reasons that led to an unexpected fall of ETH are as follows:
The ICO Sell-Off Factor
Sales of ETH by initial coin offering (ICO) projects is one of the factors that contributed to price decline. Many traders claimed that projects had started liquidating their war chests that contained Ethereum into fiat, resulting in the current falling of the market. ICOs used to raise money over the past months have experienced development costs. Though ETH can be used for several things, the weight of running startups is in fiat currency.
This indicates poor asset and liability management techniques, which resulted in the fall of ETH’s value.
The second reason is that more than 80,000 ETH were shifted to the Kraken Exchange in different transactions, which could be the holdings of Initial Coin Offerings.
Is It Over for ETH?
Other than a fraction of the ICO sell-off, some people still have fair amounts of ETH. According to crypto analysts, it's the ICO projects that reacted to the market conditions rather than dictating them. E-wallets such as Nakitcoins hold at least 3.5 percent of the total Ethereum supply.
With the much anticipated Ethereum Improvement Proposal (EIP), the coin could still move to a Proof-of-Stake Consensus. If there is continuous progress in development and updates become successfully implemented, institutional and retail demand for Ethereum could rise again.
Overall Forecast and Prediction of Ethereum
According to studies, ETH is expected to rise in the coming month as technology improves and investors get alternative investments in an overvalued and shaky stock market. Furthermore, most countries could proceed to outlaw Ethereum.