Last year’s broadcast was the “star” cryptocurrency, outpacing the growth rate of bitcoin. However, in 2018, everything changed.
The second market capitalization of cryptocurrency lost value 76%, and it is not the limit. The patience of investors is not infinite: the asset was not in the mainstream, traders are on the decline, and competitors are a tough fight for the top.
In fact, the token “ether” is a cryptocurrency Ethereum network. If bitcoin gives access to global financial networks, the broadcast strives to create a world computer. Broadcast can be compared to gasoline for the car. Using tokens like using the fuel they need to run specific functions on the blockchain.
At the end of last year, a huge number of initial offers of coins built their applications on the Ethereum blockchain. Investors saw this as an opportunity to benefit.
Kyle Chapman, an analyst at Cosimo Ventures, explains:
When the people saw the growing trend of ICO, they decided that it would be a long-term store of value. It was a signal and that’s why we saw extreme growth in the past year.
According Autonomous the Next, last year the ICO has attracted more than $7 billion. However, many of these startups have gone bankrupt or have been recognized by regulators fraudulent. Some of the projects on the Ethereum blockchain have become quite successful, but had not received such quick and wide recognition, which investors had hoped.
Managing partner of cryptocurrency hedge Fund Capital Multicoin Kyle Samani believes that the fall in the price of Ethereum in 2018, has occurred for this reason:
People started to create apps, but the market is ahead of itself. Investors understand that in this market you need to be for a long time, but some don’t have the patience.
The Ethereum definitely have first-mover advantage, but also a target on my back too.
For example, the startup EOS was announced as “the killer of Ethereum” and raised $4 billion during the ICO (the finished product was launched in June, is not without rough edges). The project spent considerable resources to encourage developers to create applications on the new platform, trying to take the place of Ethereum.
CEO stablein the Kowala Eiland Glover says:
The Ethereum is facing a huge crisis of investor confidence because of the inability to scale quickly in the competitive environment. The uncertainty ahead and the rejection of decentralized applications in General aggravate the situation ERC20 tokens on the market.
The other contenders for the “throne” Ethereum is NEO, Cardano, QTUM, Tezos and Ethereum Classic.
Ethereum critics complain of his limited speed and inability to scale. Today blackany such as bitcoin and Ethereum, can handle from three to 15 transactions per second (for comparison, Visa or Mastercard handle tens of thousands of transactions per second).
FUD — fear, uncertainty and doubt
Cryptomnesia well know the acronym, and scientists say that this phenomenon actually affects the price of air.
Regardless, talking about pioneer or not, when it comes to technology and price of the cryptocurrency, the perception is as important as the facts.
According to market analyst eToro Matthew Newton, fuss about vulnerabilities Ethereum too attracts attention and has a negative effect on the price of the air:
And there’s a lot of FUD around the “death” of air that contributes to emotional sale.
He also said that many keep the Ethereum ICO, but last year “witnessed how depleted the huge stocks”. To manage cash flow and expenses, many had to sell part of cryptocurrency funds if not all.
CEO and co-founder of blockchain network Ambrosus angel, Vercetti believes that the Ethereum works better than the newer blackany, and that negative “speculative” simply the best competitors.
In addition to competitors entering the market, Ethereum also have to contend with players on the decline. This year p2p platform BitMEX came up with a swap product that allows you to bet against the ether, and, according to former Goldman Sachs analyst and CEO CoinFi Timothy Tam, to restrain prices.
The reality is that it is now easier to short live, and this contributes to downwards movement. Live while inefficient, but the methods of its application have not changed.
Tam, which has experience in two hedge funds in Hong Kong, said that the manipulation in the market — recognized problem of bitcoin is that inherent and Ethereum.
When last year bitcoin went up almost to $20,000, the air seemed even better bet.
According to CoinMarketCap, in the past year, bitcoin has increased by 1318%, and the Ethereum showed an increase 9162% to more than $756, starting with $8.
Since both cryptocurrencies are struggling to find a stable position in the market. In 2018 bitcoin decreased by 54% (losing $1000 over the last 48 hours). However, the Ethereum was worse: this year he lost 76% and is trading around $219 at the time of this post.
While some are already looking for the “next aired”, Tam said that more patient investors, these failures can be a wonderful opportunity to purchase. He believes that we will later look back and say that the current $200 is “insanely cheap”.
According to the materials of CNBC