Initial Coin Offering’s Ethereum Balances Yet to Be Sold but Could Spark Another Drop for ETH Price
As per market data available on the internet, it appears as though there is still a lot of Ether tied with existing ICO projects. As a result of this, a fresh new fear of ‘mass liquidation’ is now in the air which could possibly send down the value of Ether even lower in the coming few days and weeks (with many analysts even suggesting that the digital currency could stoop to its early 2017 levels).
What’s In Store For Ethereum In The Near Future?
As things stand, Ether’s market value has already been reduced to an 18 month low of around $126. This represents a dramatic crash of the once premier asset which was trading at an ATH (all-time high) of around $1400 just over ten months back.
In terms of what is causing this latest dump, many analysts are saying that the SEC’s latest ruling against two ICO projects could possibly be behind this sell off. Not only that, recently, Zachary Coburn, the man behind Etherdelta, was also called up by the SEC for “operating an unregistered national securities exchange”. However, this news still does not justify a 40% drop in the intrinsic value of a premier currency (by any stretch of imagination).
More On The Matter
It is also worth noting that a recently released research study by online media outlet ‘The Block’ shows that ICO treasuries now have in their possession just a little more than 3.57 million ETH tokens. This number roughly translates to around 3.5% of the world’s total Ethereum supply.
Also, as the price of ETH keeps dropping, it seems as though more and more companies will have to dump their crypto holdings in order to procure some tangible fiat assets moving forward.
Lastly, the research also states that in April this year, ICO treasuries held 4.65 million ETH, or 4.5% of the total token Ethereum supply. What this seems to imply us that since April, many of these ICO projects seem to have liquidated a majority of their digital asset supplies.
Ethereum is currently back at its early 2017 levels, which means that ICOs will most likely not look to sell off their remaining tokens anytime soon.
However, a major concern moving forward is that most ICO projects are no longer “generating any new revenue streams” and thus as a desperate attempt to cut short their losses, they might have to sell off all of their remaining digital holdings.