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The one month cryptocurrency slide continued overnight with ether, the cryptocurrency of the Ethereum network, which fell below $ 100 for the first time since May 2017. The value of Ether is down 93% compared to the maximum of January over $ 1,400.
Last week Bitcoin reached the 2018 low of around $ 3,500. It is now trading at around $ 3,700, down 80% from its peak of nearly $ 20,000 last December.
There does not seem to be any specific cause for recent declines. Rather, prices in constant decline seem to reflect a general decline in enthusiasm for cryptocurrency.
Blockchain-oriented startups raised $ 597 million in risk capital in 2016, $ 876 million in 2017 and $ 3.1 billion so far in 2018, according to data collected by Coindesk. Despite this massive investment of years, technology seems almost closer to traditional adoption than it was a couple of years ago.
Some of the most successful blockchain startups to date have been exchanges like Coinbase that allow users to exchange cryptocurrencies and conventional money. But nobody understood how to build mass-market applications based on blockchain technology.
Unless and until that happens, we may continue to see the value of cryptocurrencies continue to decline over time. Virtual currencies certainly have some value as a store of value that is difficult to track and a way to conduct illicit transactions, but last year's high ratings were based on the assumption that blockchain technology would have had wider uses. And so far, this has not proved true.
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