Top 3 Ethereum (ETH) Price Drop Insights From $1,390 To $200 USD

Ethereum (ETH) was one of the most affected virtual currencies in the market during this bear trend. At the beginning of the year, each ETH coin was traded around $1400 dollars. Months later it reached the lowest point in more than a year after falling under $200 to $175 dollars. That means that Ethereum lost more than 85% of its value during 2018.

There are three important factors that have affected the price of Ethereum in the last months. Perhaps, one of the most important was related to Initial Coin Offerings (ICOs). During the last bull run in the crypto market in 2017, there was an ICO boom in the industry. There were several projects starting to launch their own virtual currencies, receive funds and develop their platforms.

Most of these projects were launched on top of Ethereum and received ETH for their tokens. ICOs that had large holdings of Ethereum, decided to sell their funds in order to start working on their platforms. This has triggered other ICOs to start doing the same, liquidating their funds in ETH with the intention not to sell later at lower rates. In this way, Ethereum has lost over 85% in just a few months.

Another reason why Ethereum lost part of its value could be related to the upgrade that will be improving the scalability of the network. Ethereum’s core developers decided to schedule a hard fork for October 2018 but it was postponed for the next year. This software upgrade is known as Constantinople and would help the network to transition from Proof of Work (PoW) to Proof of Stake (PoS). Since the hard fork was delayed, users decided to sell part of their holdings for BTC or other coins.

There is a third reason related to Ethereum and why it lost part of its price. There are other networks that are working very well and have similar functionalities as Ethereum. For example, TRON (TRX) is attracting an important number of investors and users. Tron can handle more transactions per second (TPS) than Ethereum and it is able to process these transfers faster. Furthermore, Tron has also activated the Tron Virtual Machine (TVM) that has attracted several users and developers from Ethereum to the Tron network.

These three issues could have played an important role in Ethereum’s price decline in the last months. However, the whole cryptocurrency market is in a bear trend since the beginning of the year. Several virtual currencies have also lost more than 95% of their price in the last months.

At the time of writing, Ethereum is the second most valuable virtual currency with a market capitalization of $21 billion dollars. Each ETH token can be purchased for $205 dollars according to CoinMarketCap.

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