The cryptocurrency market is in a state of severe flux – volatility is the norm, but the past few weeks have been a hurricane of peaks and valleys. While some currencies are weathering the storm, Ethereum (ETH) seems to have been blown away. Once easily the second most valued cryptocurrency, ETH is now facing a crisis as the price-per-unit drops below $200.
The most recent drop seems to coincide with miners abandoning the blockchain for greener pastures. This lack of confidence does not bode well for Ethereum – but they are not out of the game by any means. The current bear market refuses to let go, and even Vitalik Buterin himself believes that the days of explosive growth may be over. While this means less stunning profits, it may also allow the industry to shift towards a more sustainable model over time.
Ethereum’s Place in the Crypto-World
Ethereum occupies a unique space within the cryptocurrency industry – their ERC-20 standard is in use by most of the altcoin economy. As such, without a total collapse of the cryptocurrency market, there is little reason to expect that Ethereum will fail. Still, investors have very little confidence that the second-place blockchain will recover in the near future – shorting is at an all-time high and going against Ethereum seems like a safe bet.
Bitcoin may have set the stage for the cryptocurrency revolution, but Ethereum is the fuel that keeps it moving. The entire idea of a decentralized ecosystem of applications and infrastructure comes directly from Ether. The ability for a cryptocurrency to exist as more than just digital money came about in the wake of dApps built on the Ethereum blockchain. While several chains have been touted as the ‘Ethereum Killer’, none are yet in a state to step up – should ETH fall.
The Future of Ethereum
Newer investors may look at the recent drops with a combination of shock and despair – but this isn’t the first, or the worst, price drop in Ethereum history. Last summer, the infamous Ethereum Flash Crash dropped the price from over $300 USD to $0.10 in a matter of seconds. While the ecosystem quickly recovered, this type of volatility is still possible given the relative size of the market.
Ethereum remains one of the strongest cryptocurrencies in the industry. Market cap still places Ethereum at more than twice the overall value of their nearest competitor – $20 billion versus Ripple’s (XRP) $10. The situation looks dire in the short term, but the established infrastructure is unlikely to allow Ethereum’s total failure.
Article By: Adam Stone