Ethereum has plummeted to a new 12-month low, continuing on its downward price trajectory. The second-ranked cryptocurrency has so far failed to actualize the considerable potential identified by stakeholders since its inception.
ETH Price Plunge
The recent cryptocurrency market dip that began on Wednesday has taken the price of Ethereum to even lower lows. At the time of writing this article, ETH was trading at $222 which means that its price has declined by more than 80 percent since the start of the year.
Ethereum’s decline is significantly worse than that of Bitcoin. The second-ranked cryptocurrency has been in steady decline since briefly rising above $800 at the start of May 2018.
ICO Failure
In 2017, Bitcoin and initial coin offerings (ICOs) stole the show. Many experts predicted that Ethereum would be the standout performer of 2018. After all, despite the massive gain in BTC price in 2017, ETH performed even better, based on annual percentage increase.
Many of the ICO projects in 2017 built their platforms in the Ethereum blockchain. These projects raked in hundreds of millions of dollars, creating a palpable buzz around not only the cryptocurrency arena in general but Ethereum in particular.
However, in 2018, many of these projects have failed to hit the ground running. The SEC crackdown has proven many of them to be scams while the others have been unable to secure broad market adoption. As a result, the proportion of Ether utility that was supposed to come from the ICO token commerce has so far been minimal.
Miscellaneous Market Factors
Apart from the failure of ICO projects, there have also been other market factors that have adversely affected the Ethereum price performance in 2018. First of all, after the heights attained in late 2017, the new year brought with it a massive market correction. Negative policies from several governments weakened investor confidence, and the cryptocurrency market lost more than half of its market capitalization by February 2018.
With the shrinking in the market and cryptocurrency tokens still highly coupled together, Ethereum was unable to escape the general price onslaught. To compound matters, ETH has also had to go against a slightly stronger U.S. dollar which has exacerbated the negative effects of the ICO token slumps.
Despite all of these issues, Ethereum might yet recover based on the planned updates that are expected to improve the efficiency of the blockchain materially. In the interim, however, Ethereum investors are worse off now than they were twelve months ago.
Do you think Ethereum will be able to recover from this present slump? Keep the conversation going in the comment section below.
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