Since reaching the record of $ 1400 at the beginning of the year, Ethereum, the second largest cryptocurrency, has struggled like the rest of the other cryptographic coins. Since then, ETH has lost more than 70% of its value. However, recent developments indicate that a rally could be imminent that could see the token claim its previous glories.
Below we will look at two main reasons why ETH is underestimated. I am convinced that the price of the ETH has been dragged downward as a correction from the imposing peak and with an encrypted market ripped off by hacks, manipulations and other evils.
- Mass Adoption of the Ethereum Platform
Steven Nerayoff, The token co-creator Ether at the beginning of the year said he expected the price of Ethereum to have tripled by the end of 2018 This is because many companies were observing the Ethereum protocol and wondered how they could benefit from it.
to fast money CNBC said:
"What you are seeing with Ethereum is the exponential increase in the number of projects – there are billions of dollars that are being paid into the ecosystem right now – perhaps 10 times more projects this year than last year, which could easily lead to a doubling, probably a triple of the price by the end of the year. "
He attributed the greatest adoption to the capacity of the platform to make economic and fast transactions with respect to its r ivals.
To ensure this was possible, Ethereum developers released Casper in May, a protocol that combines Proof-of-Work and Proof-of-Stake algorithms, and in the process makes it easier to create Ethereum blocks and even reduces the complexity of the whole blockchain. (This is also a solution that could apply directly to the comments of the CEO of Binance Zhao this month on the speed of ETH … Although in a support toast, Binance has recently acquired an Ethereum portfolio, showing optimism for the future of
The sentiment Circle CEO Jeremy Allaire echoed last month as he spoke to CNBC Fast Money claiming he had planned Ethereum to lead mass adoption of cryptocurrencies because the project has the largest pool of developers.
ETH, unlike Bitcoin, is a protocol platform and its value is not only in its estimated value, but it will have to be purchased for its utility, a utility directly linked to the amount of load of work streaming through the ETH blockchain
The biggest advantage ETH has as related to the adoption is the huge number of engineers focused on a single platform (Ethe reum) rather than on smaller teams focused on the currency with which they chose ICO. As in the 1990s, some of the world's best engineers devote themselves to making Ethereum Smart Contracts a real thing
- SEC states that Ethereum is not a security
Ok, it was not the SEC that declared it officially, but judging from the comments of a SEC director, William Hinman, during the Yahoo Finance All Markets Summit held in June this year, it is safe to say Ethereum as Bitcoin is not a security.
At the time Hinman said:
"… putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the current state of Ether, the Ethereum network and its decentralized structure , current offers and sales of Ether are not securities transactions and, as in the case of Bitcoin, the application of the regime for disclosure of federal securities laws to current transactions in Ether would seem to add little value. " That statement had the encrypted community full of excitement and since Hinman is the SEC guy who is technically responsible for interpreting the title law, this was huge. Stating that Ethereum was not a security, this meant that it would not be subject to heavy regulation by the agency.
The SEC regulation is not necessarily negative, let's face it clearly, but it is rather scary the type of investors attracted by ETH first, and general investors who might be worried about the agency that reduces liquidity # 39; ETH in a way
. The go-ahead is one of the reasons why Ethereum should bring together many institutional and traditional investors are expected to come out with confidence.
Investors can now buy without having to worry about compliance reports that break out of blue or sudden regulatory surprises. This, in turn, reduces the volatility of the price of Ethereum and also the manipulation that is easily caused by a misinterpretation of the news by the media around the world.
It is also significant as the road is clear to CME and CBOE for the launch of Ethereum futures. Just like with Bitcoin, these investment instrument providers will try to capitalize on this statement and provide investors with encrypted investment options.
Fundamentals of the price
Let's have a look at some price points. First, here is the one-year ETH chart as it trades for USD.
But when you look at the same span of a year with ETH while trading for BTC, it paints a bit of a different image. It is not yet rising, but it is not as drastic as the USD chart.
In both ETHs it is at the beginning of 2018 levels; although BTC remains a more regular relationship. This shows a little bit about the ETH relationship with the market in general, and that BTC is still a bigger player in its price.
This is to speculate in the daily volume graphs; showing that ETH trade is still largely related to other currencies; mainly USDT (Tether) but also a significant part of the ETH / BTC trade. In fact, the largest "fiat" trading pair with ETH is only half of the largest BTC trading pair. And among these there are three other BTC trading pairs on other exchanges.
ETH is still bound. That's why the two points above mean so much. The mass use and clarity of the regulations regarding what the ETH will allow investors to see that ETH can, and should, be independent as a utility and not just another cryptocurrency . When this happens, I think we will see good things.
Here is an example of this long-term TA from the Tradingview.com poster FedericoSellitti:
The ETH it is currently trading at $ 412, which represents an increase of 56.4% over the price of a year ago. Although the currency is struggling to exceed the $ 450 level as seen in the chart above, it has a tendency to start rising from the third quarter.
So if the comments of the experts were to come true and last year's trading this is why they repeat again this year, this means that the fun times could be an advantage for all fans of encryption.
However, as with any other type of investment, it is advisable to perform due diligence before investing in any cryptographic currency.  Bitcoin may have descended from the stratosphere, but there is still an abundance of opportunities in cryptocurrencies. At Coin Agora, our focus is on altcoins – small-cap crypts that have enormous potential to upset corporate ecosystems. Invest with us for the opportunity to enter the ground floor. Our mission is to help you find small, new and growing coins and collect rich returns. Let us help you overcome the noise and find the winners – join the Coin Agora community today!
Disclosure: We are / are long ETH-USD.
I wrote this article by myself, and expresses my own opinions I am not receiving any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose title is mentioned in this article.