Even though Ethereum project has undergone considerable advancement, in recent times, the cryptocurrency has recorded a new year-till-date low of about $183. Since July 2017, it is the first time the crypto has crashed below $200, after hitting a peak of just under $1400 in mid-January.
The unpredictable cryptocurrency market is seeing blood bath, with overall crypto market capitalization plummeting to $198 billion.
Commenting on the Ether’s decline and overall bearishness in the market, Vitalik Buterin, co-founder of Ethereum, said
“The blockchain space is getting to the point where there’s a ceiling in sight. If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore.”
That’s not delightful news for speculators who purchased cryptos at soaring price levels in 2018, trusting to stop losses from the year-long slump. And it’s necessary to have practical anticipations for possible gains following last December’s astounding flare-up in crypto prices that billionaire Mike Novogratz referred to as a “retail bubble.” Others in Wall Street called it a new age version of “Tulip Mania.”
Firms have liquidated $30M Of ETH This Week, Still $600M remains
As it happens in case of any trending subject, the death of ETH has been a matter of detailed discussion among investors, crypto analysts and industry leaders. Everybody had something to utter about Ethereum’s fierce decline, with many using social media platforms to give their opinion on the matter. While there was no shortage of contradicting, emotion-based conclusions, there were a few opinions based on rationale.
One of those notable opinions came from renowned cryptocurrency researcher Kevin Rooke. Through a tweet, Rooke clearly displayed the correlation between ICOs and Ethereum’s price. The chart reveals why ETH bore the brunt of late.
ICOs have spent over $30 million worth of ETH this week (153,500 ETH).
This is more than any week since March 2018.
The scary part? These ICOs still have over $600,000,000 worth of treasury ETH in their accounts (3,000,000+ ETH).
Will they sell? Will they hold? ?♂️ pic.twitter.com/DlGGziEBAZ
— Kevin Rooke (@kerooke) September 11, 2018
Per the data provided by Santiment, a leading crypto analytics provider, ICOs have used up over $30 million worth of Ethereum last week, or 153,500 ETH to be precise. Even though “spent” has several meanings as far as blockchain ecosystem is concerned, it can be argued that a major portion of the 153,500 ETH were diluted on spot cryptocurrency exchanges so that ventures could obtain fiat for smooth going.
The dilution of 153,500 ETH is not the only logical explanation for the market’s decline by 20% over the past week. However, it would be rational to presume that the “ICO sell-off” did play a part in this decline. Nevertheless, as Rooke pointed out, ICOs hold more than $600 million worth of Ether (approximately three million Ether) in their coffers, raising concerns of a huge selloff.
This argument reflects a similar statement made by Alex Kruger, a renowned cryptocurrency critic, a few weeks back. Kruger, in a tweet dated August 23 said:
“According to @santimentfeed‘s database, ICOs for which their Ethereum wallets are known have a visible balance of ETH 3.3 million, or $900 million at current prices. ETH 135K were transferred out / spent in the last 30 days (about 4%).”
However, Nouriel Roubini, economist and professor at New York’s Stern School of Business, recently tweeted that it is “no wonder [that] Ethereum is collapsing.”
Roubini clarified that a bulk of the DApps on the Ethereum network are “CryptoKitties, scammy Ponzi pyramid schemes & casino games,” while the remaining applications are DEXs, which “[nobody] uses as 99% of transactions are on centralized exchanges.”
No wonder Ethereum is collapsing. 75% of DApps are crypto-kitties, scammy Ponzi pyramid schemes & Casino games. The other 25% are DEX that no one uses as 99% of transactions are on centralized exchanges. & 99% of crypto-currencies have already lost 99% of their value. Meltdown!
— Nouriel Roubini (@Nouriel) September 9, 2018
Whatever may be the reason, it is obvious that the Ethereum project has turned out to be the topic of analysis and discussion among the cryptocommunity, and for now, this attitude is unlikely to change.