There is still a lot of Ethereum linked in ICO projects and the fear is that a mass liquidation can postpone the token below three digits in price or worse at 2017 levels.
ETH Return to the stone age?
Ethereum is already in a world of pain, falling to a minimum of 18 months this week of $ 126. The colossal dump added to the 11-month slide represents an epic crash of 91% from its historical high to just over $ 1,400 in January .
The last selloff was accused by some in the SEC ruling against two minor players in the ICO world. About a week before EtherDelta's founder, Zachary Coburn, was commissioned by the SEC to run an unregistered national stock exchange. However, the US regulator has thrown its weight around before, so it is unlikely that the news is the main catalyst for Ethereum that almost 40% downloads in just a week.
The Block's research indicates that ICO treasuries now hold just over 3.57 million ETH, accounting for about 3.5% of the total supply of Ethereum. Most companies that hold an ICO have raised funds in ETH and still hold a large part of it. A growing concern now is that further actions or restrictive measures by the SEC on ICOs could force them to repay USD funds. To do this, they should liquidate their ETH reserves.
In April, ICO treasuries held 4.25 million ETHs, accounting for 4.5% of supply. This suggests that they may have already liquidated or moved around 23% since then. According to the research, ICO reserves held $ 1.76 billion, while today they hold a fraction of about $ 475 million. Overall, ICO projects have moved or liquidated 64% of the amount initially collected, so it seems that the main selloff has already occurred. Only 2% has been sold in the last two months, indicating that the recent purge can not yet be blamed on ICO projects.
Since Ethereum has become a knife that falls recently, it is obvious that ICO will no longer sell unless they absolutely have to. It is currently priced around $ 130, which has returned to the level it was before the big ICO boom took off towards the end of 2017.
However, a major concern is that most ICOs are not generating revenue, so it may be necessary to sell ETH to cover their operating expenses. Add to this the looming threat of further SEC sentences against ICO and unregistered titles and Ethereum, it seems, may not be out of trouble yet. For their part, Ethereum still has much progress to make and many improvements in terms of scalability are expected in 2019. This will lead to greater adoption that should bring life back to the "world computer".
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