I am an Ethereum blockchain and Ether (ETH) cryptocurrency bull. However, we sold a losing position in ETH today after previously believing that $250 presented a great buy-in opportunity. Unfortunately, that’s not the case, and when we look at where ETH started, not too long ago at $9, there is reason to believe the price could continue to fall in the immediate future.
Specifically, the entire crypto market is in turmoil with 2018 mostly a bear market from the beginning. And while the most recent round of chaos caused by the Bitcoin Cash hard fork seems to have a clear path, what really concerns me in the immediate future for Ether is the regulatory crackdown and the realization that most projects funded and operating on the Ethereum blockchain are indeed worthless. CCN recently published a story showing how ICO lead projects have mostly nothing to show after raising $30 billion. This is in part the result of rapid depreciation of crypto prices where $30 billion raised is more likely the equivalent of $5 billion today.
Nonetheless, Ether does not have Bitcoin’s appeal when it comes to purchases, and if the ICO party is really over, then that clearly does not bode well for the Ethereum blockchain or ETH.
Another factor I recently considered is the rotation of capital in Ether. One could argue that owners of Ether prior to the ICO boom were true believers in the network and decentralization, individuals willing to invest their gains into other projects built on the Ethereum project to effectively keep Ether in the network and moving to create value and bring awareness. Unfortunately, the projects who received that Ether may not have shared similar beliefs, cashing out their Ether in exchange for cash or simply failing.
With that said, I do think Ether will stand the test of time and that many projects will rise from the ashes to become legitimate forces in the tech industry. But rest assure, this is the Dotcom bubble 2.0 and Ether is the “Web”. It is still a great investment long-term, but I am not sure how far it could fall short-term, and that uncertainty is frightening to consider.