It is no secret that the value of Ethereum (ETH) in cryptographic markets was one of the hardest by the assault on the bear market that began in February. Around this time, ETH was trading at levels not too far from its January high of $ 1,400. ETH is currently trading at $ 203 at the time of writing this: a decline of 85% from its peak value. The digital resource had dropped to $ 189 on October 12 after the false news that Goldman Sachs had broken plans for a Bitcoin negotiation and cryptography counter.
3 factors that influence the current price of ETH
Several reasons for the decline of ETH have been postulated throughout the crypto verse. But let's examine three factors on why Ethereum has decreased by 85% in less than 12 months.
To start with, it is the ICO theory that many of the crowdfunding projects are liquidating the PF generated in an attempt to protect themselves from the current bear market. Refreshing our memory, we recall that the ICO boom took place somewhere between November of last year and March of this year. In November, ETH was valued at around $ 300 and in January it was $ 1,400. In March of this year, its value was about $ 700, so it is understandable if the financial managers of these ICOs had given the green light to liquidate all holdings to prevent further losses.
secondly, the Ethereum network is scheduled for an update that aims to solve the problems of scalability on the network. The main developers of Ethereum had planned a hard lunch this October, which was later postponed to next year. Known as Constantinople, the software update aims to usher in the transition from a work trial to a Proof of Stake blockchain network. The delay has caused a psychological blow to investors who have probably sold part of their holdings or covered by further losses by buying BTC. Because of this fact, other experienced traders have chosen to shorten the ETH in the markets.
A third reason because the price of Ethereum has not improved, it is the emergence of competing blockchain projects that have a faster, cheaper and more efficient network. One of these projects is TRON and the platform can handle 2,000 transactions per second compared to 25 of Ethereum. The number of daily transactions on the Tron network has also exploded since the Tron Virtual Machine was activated on October 12th. As more DApps are now created on the Tron network, the need to scale the Ethereum network has never been greater than the current one.
summing up, we examined three possible reasons that influence the price of Ethereum in crypto markets. We started with the ICO theory that sell their ETH because of the bear market. We have therefore postulated the theory that the postponement of the fork of Constantinople would have had a psychological effect on investors. Finally, we explored the competition in the form of Tron which proved to be a faster, cheaper and more efficient network.
Another way to look at the current ETH situation is that the digital resource It is highly obvious right now. Therefore, now is an opportune time to acquire and store the digital asset in anticipation of a market recovery and planned updates.
What are your opinions on the current price of Ethereum? Let us know in the comments section below.
Disclaimer: This article is not intended to give financial advice. Any opinion here is purely that of the author and does not represent the opinion of Ethereum World News or its other writers. Perform your research before investing in one of the many cryptocurrencies available. Thank you.