Ethereum tanks but crypto continues move to the mainstream
The second largest crypto at its lowest yearly level but positivity from Wall Street, NASDAQ and EU could indicate everyday adoption is on the way
The shine might have come off the world’s second largest crypto-currency but, as Ethereum leads markets down to their lowest levels this year, significant mainstream developments mean there still remains optimism for the long term future of crypto.
Ethereum’s ETH token has shed 26% on the week after dropping to $170 on Wednesday, its lowest level since July 2017. At the time of writing the ETH had recovered marginally and was trading around the $190 range. Since its all-time high in January of about $1,400 Ethereum has nosedived 86% to its present level.
The decline has been largely blamed on initial coin offerings (ICOs) which have raised funds this year in ETH. These funds are now being cashed out which has seen the market flooded with Ethereum, which has dumped in value. In more general terms, this has also been a result of the general cooling off of the crypto market which has also shed over 75% since its peak in January.
Ethereum is different to Bitcoin in that it is more of a software platform rather than a direct currency. Touted as the world computer, Ethereum allows decentralized applications (dApps) to run on its blockchain using smart contracts. These are programmable digital contracts that are immutable and trustless. The applications for the technology are boundless, however the current market conditions are failing to reflect that.
Bitcoin on the other hand is a pure store of value. It is no stranger to these huge booms and busts having several 80% plus crashes over its decade long lifespan and recovering from all of them. Bitcoin is currently weathering the storm as its market dominance continues to climb at the expense of Ethereum and the other altcoins.
A number of mainstream media outlets have compared this year’s crypto crumble to the dot-com crash in 2000. Indeed, a lot of money was lost back then but it also spawned the new tech giants that are now worth billions.
Crypto is an embryonic industry that will surely have to go through several more periods of extreme volatility before it can become as commonplace as the internet is today. Several recent key developments have been positive for the industry, however, despite the fact that speculators and traders seem to be in the market for a quick buck only.
Wall Street is paying attention with Citigroup and NASDAQ looking to launch crypto related tools and products. US based Gemini exchange, owned by the Winkelvoss brothers, has become fully licensed and will launch its own stablecoin.
The EU commission has stated that crypto is here to stay, Ethereum futures and exchange-traded fund markets could be launched soon and, notably, these crashes have happened before. Crypto is just beginning so a year of boom followed by a year of bust.
It might not be ready to be considered for mainstream adoption and daily usage, but many in the sector are saying that these developments show that time is coming closer.