ICO is blamed on Ethereum (ETH) Sinking Price


Ethereum (ETH) – After a 16% drop in value over 24 hours, the price of Ethereum fell to its lowest point in almost a year. Trading at $ 265 at the time of writing, the second largest cryptocurrency by market capitalization has completely retraced the gains made since the start of this year's massive run. While some have indicated the general status of the cryptomates as being inflated and unhealthy, with mortgages across the board recording double-digit losses in the week, the head of the encrypted fund BloomWater Capital is blaming the ICOs that they cash out.

As Bloomberg points out, the huge number of ICO built on the Ethereum blockchain was the primary catalyst for Ether's price gain over the past year, in addition to the significant amount of interest development that has generated. Now, the same usability is leading to a fall in prices that is surpassing Bitcoin, since investors who had previously purchased ETH to participate in Initial Coin Offerings (ICO) remained out of business.

Considering that most of the ICOs released in the last year were built as ERC-20 tokens, it is logical that investors buy with existing Ether coins. In addition, Ethereum has lower mining commissions and shorter average transaction times than Bitcoin, although it remains a highly recognized currency. While previous reports have seen the ICO market double the volume in the first half of 2017, the existing ICOs are grossing huge volumes to cover the costs of falling market crash. The result is a forced sale of Ether, which carries the price of Eth at a lower price than other currencies in the market such as BTC.

Biswas Das, director of BloomWater Capital, accuses the amateur development that fills the ICO space, which has a much lower regulation than typical startups and a total lower barrier to entry, both helping to create headaches for investors and aspiring project speculators [19659008] "These startups are collecting a lot of money but they do not have sufficient cash management or liquidity management experience, so they are selling too soon and causing a lot of pressure in the market. last year was fine, but at this time the market is so fragile that it causes a lot of pressure. "

As Das says, the fragility of the current market is not able to resist forced selling and downward pressure of the ICOs who cash in to cover the costs, dropping Ethereum to price levels not seen since the middle of last year. Bloomberg also highlights growing concerns about the ability of the Ethereum network to manage transactional volume as well as the creation of ICOs on the platform. The final result was other cryptocurrencies focused on the platform that have developed in the meantime, such as Cardan's ADA and TRON's TRX, to fill the gap in investor skepticism that Ethereum was able to manage the volume of development.

Bloomberg also quotes Spencer Bogart of Blockchain Capital LLC, stating that the general disillusionment in ICOs, in conjunction with the growing histories of scams and genuine outbursts, has caused some backlash to the platform hosting ERC-20 based tokens,

"Investors are increasingly disappointed with tokens and ICOs, most of whom have been launched on Ethereum and we are seeing this game on the market with downward price pressure."

The ICO managed to prosper despite the bearish market of 2018, though not without controversy. A study published at the beginning of the year found that 80% of ICOs can be classified as a "scammer".

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