Ethereum is the cryptocurrency with the second largest capitalization. It is preferred by ICO organizers and software developers, but, nevertheless, at the end of the first quarter, its price in percentage terms dropped significantly more than the price of competing cryptocurrencies.
Ethereum led the way in terms of growth at the start of the quarter, but then fell 54.9%, moving the coin to the bottom of the top five cryptocurrencies.
The coin has always been popular for its flexibility and productivity, which is why these latest statistics seem so strange. This may be because Vitaly Buterin recently proposed charging for online data storage, worrying investors.
Some experts comment on the situation as follows:
“Ethereum faces the same problems as many startups. He becomes a victim of his own success - with losses, one cannot pretend to grow for long. Someone has to pay the bills,” says Jeff Coyen, president of 360 Blockchain USA;
In addition, Ethereum faces the same regulatory pressures as other cryptocurrencies.
“It is necessary to separate ICOs and cryptocurrencies. "ICOs that are truly securities offerings should be regulated in the same way that securities offerings are regulated." - Jay Clayton, Chairman of the Securities and Exchange Commission
Over the past few months, many ICOs have been found to be fraudulent, causing distrust and uncertainty and affecting the price of Ether.
Note. editor:But this problem is rather due to the fact that most of those who enter the crypto business do not separate cryptocurrency and the technology that stands behind it. Yes, the Ethereum blockchain has features that make it convenient for concluding smart contracts, which is why most ICOs use it. But the negativity that accompanies the wave of information about ICO dummies also casts a shadow on the ether coin. To be fair, it is worth adding that this trend also works in the opposite direction. How else can you explain the reason why social networks ban blockchain advertising? The fear of cryptocurrencies extends to the technology behind them.
Finally, another problem Ethereum faces is the sell-off of successful ICOs. Tim Enneking, founder and managing director of Crypto Asset Management, said:
“This is happening on the part of incumbent companies that own Ether coins. These companies have expenses in fiat and often sell Ether to cover them.. They are not experienced traders and sell when the price is falling, which causes further decline and panic.”
According to https://cryptodaily.co.uk
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