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Ethereum has collapsed to a new 12-month low, continuing its trajectory of falling prices. The second rank cryptocurrency has so far failed to materialize the significant potential identified by the parties concerned since its inception.
ETH Price Plunge
The recent decline in the cryptocurrency market started on Wednesday brought the price of Ethereum to even lower levels. At the time of writing this article, ETH was trading at $ 222, which means its price has declined more than 80% from the start of the year.
The decline of Ethereum is significantly worse than that of Bitcoin. The second-level cryptocurrency has been steadily declining since it rose rapidly above the $ 800 at the beginning of May 2018.
ICO Failure
In 2017, Bitcoin and the initial offers of coins (ICO) have stolen the show. Many experts have predicted that Ethereum would be the protagonist of 2018. After all, despite the huge increase in the BTC price in 2017, ETH has achieved even better results, based on the annual percentage increase.
Many of the ICO projects in 2017 built their platforms in the Ethereum blockchain. These projects have yielded hundreds of millions of dollars, creating a palpable buzz around not only the cryptocurrency arena in general, but that of Ethereum in particular.
However, in 2018, many of these projects were not scored. The repression of the SEC has shown that many of them are scams, while others have not been able to guarantee a broad adoption in the market. As a result, the proportion of the Ether utility that was to come from the ICO token trade has been minimal so far.
Various market factors
In addition to the failure of ICO projects, there were also other market factors that negatively affected the performance of Ethereum prices in 2018. First, after the heights reached at the end of 2017, the new year has resulted in a massive market correction. The negative policies of different governments have weakened investor confidence and the cryptocurrency market has lost more than half of its market capitalization by February 2018.
With the contraction of market stocks and cryptocurrencies still strongly coupled, Ethereum was able to escape the general assault price. To complicate matters, ETH also had to go against a slightly stronger US dollar which exacerbated the negative effects of the collapse of ICO tokens.
Despite all these problems, Ethereum could still recover based on planned updates that should materially improve the efficiency of the blockchain. In the meantime, however, Ethereum's investors are worse off than they were twelve months ago.
Do you think Ethereum will be able to recover from this current crisis? Continue the conversation in the comments section below.
Images courtesy of Coinmarketcap and ShutterStock
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