During the last couple of weeks, the cryptocurrency and other blockchain based digital assets market experienced a major decline as seen last time in early 2017. Most of the list compiled by CoinMarketCap, indicating the top assets based on market capitalization, was ‘red’ for almost a week straight. Despite the downtrend that many assume was generated by a high tendency of altcoins to mimic Bitcoin‘s (BTC) chart, there were some assets that not only stood solidly during the wave of terror but also increased their price per unit and therefore their total market capitalization during that time. Besides some altcoins beyond the top 100, only a couple showcased a significant growth while most assets plumped into the ‘red’ area. One of these ‘survivor coins’ would definitely be Ethereum (ETH) and for a number of reasons, we are about to investigate.
During the ‘bloodbath‘, as the community calls these inter-social events around the crypto-sphere, where a huge portion of the total market starts to show weakness towards breaking through into unexplored areas of numbers, indicating the total market capitalization of A specific asset, nobody had to say anything. Both individual investors and major blockchain based platforms and their digital assets stood still and silent. Noone talked or posted about moon, ‘lambos’ or fud. Noone really attempted predicting the price of an X asset and nobody wanted to interfere with the fragile situation of the market at that time.
Sure, we heard a lot of worrying ‘news’ from India banning cryptocurrencies to Mark Zuckerberg banning crypto and ICO related ads from his social platform Facebook, but these were not even close to the reason the market went down so much so fast. We knew that since early 2018, the professional trading and investing scene was going to enter the crypto world with ‘swag’. What does that mean for the average crypto-investor? Well, simply put the markets would not run like a ‘rodeo bull’ from now and on, but will be rather ‘defined’ behind the scenes and start showing patterns we never saw or thought about before. Wall Street sharks planned to short Bitcoin’s price in order to enter the game at a relevantly ‘good price’, while at the same time attracting more of their friends and bankers to join the wave with their move. The market had to fall, simply because it suited the professional monetary game. One digital asset tho seemed not only unaffected by that fact but it expressed significant growths in January alone. Yes, we’re talking about Ethereum (ETH).
So, Ethereum is a cryptocurrency based on Bitcoin’s vision, only that it’s faster, more scalable, cheaper and reliable since it’s part of the Enterprise Ethereum Alliance, a non-profit organization based in Switzerland and not just a “thin air” project on GitHub. Of course, Ethereum experienced its own drops in price but they were not attached to the Bitcoin chart. Ethereum made a jump from $600 to $1400 as for price per unit in a couple weeks. When everything was falling from -30% to -100%, Ethereum experienced a growth of more than +100% in a matter of days. Even after the significant drop back to the $600 area last night, Ethereum managed to recover instantly reaching a price of $850 per unit (ETH) after a few trading moments.
There are several notable facts about what is causing Ethereum‘s solid and standalone position during the ‘bloodbath‘ led by Bitcoin:
Reliability
This is not the 2000s, people who are using the internet can make a solid opinion in a matter of days about something. Yes, Bitcoin was the first, the biggest and the most innovative platform back in 2009 but it’s not anymore. Old investors and even more new BTC investors try to protect their stake by spamming that it’s the ‘best’. That would work back in 2016-17 where we had around 400,000 people worldwide in the crypto sphere, but in 2017-18, where just one single cryptocurrency exchange market can meet more than 5 million users on their platform, that is simply not going to work. People learn to diversify and they try new platforms that might solve their problems. They can’t trust and invest in something that is slow, literally the most expensive at the moment, when it comes to funds transfer and it is not even a legal entity. Smart people will avoid Bitcoin and search for alternatives like Ethereum, Bitcoin Cash or Dash, for example, more often these days and that is one of the main reasons Ethereum’s price goes up. People naturally chose the platform that suits their needs the best.
Constant Upgrade
Although Ethereum is a much better choice than Bitcoin, it still lacks some points regarding scalability and tx fees since it’s relying on mining just like Bitcoin. The difference is that Vitalik Buterin (Co-Founder and CEO of Ethereum) publicly announced that they are looking for individuals, academics, and professionals to help them solve these problems in exchange for rich grants, meaning that the company constantly working in upgrading their physical and digital systems as the demand for cryptocurrencies and the exchange markets listing them increases. Unlike Bitcoin that had to split into more than 10 different forks, the Ethereum team is united and working hard to upscale their services at every possible moment. People are not ‘narrow’ like they used to be in the 30’s. They can understand that and it’s almost natural that they will prefer Ethereum as their main platform again and again.
Altcoins & ICOs
Besides the investing part, Ethereum’s Network is used by more than 80% of the altcoins at the moment for obvious reasons, and even if you want to purchase your favorite C or D grade coin with potential growth, you have to buy it with BTC or ETH. After trying both, most individuals will again, naturally choose Ethereum for that job. Transactions in the Ethereum Network are more than half in numbers than all the transactions using other networks combined, including Bitcoin transactions. At the same time, 2018 is the year of ICOs, as hundreds of new initial coin offerings ‘pop up’ almost every single day. Most of these ICOs require either Ethereum Wallets that can support ERC-20 complied tokens either Ethereum (ETH) as the main currency to exchange for the new respective token. Therefore investors who have in mind to join a pre-sale in order to catch an upcoming ICO at a good price will always make sure to have some ETH in the back pocket. That would again, naturally keep Ether’s price stable if not rising for prementioned reasons.
Today (Feb 07 2018), everything seems to be ‘green’ according to CoinMarketCap and investors look to be active and buying before the grand bull markets begin. Regardless of what they’re buying, they will have to enter BTC or ETH before that. What do you think they are going to choose as their main currency in the crypto world? Do the math and it shall be easy to guess.
What are your thoughts on Ethereum and where do you see it’s price before the end of the year? Note that Ethereum cost around $10 US dollars exactly a year before. Let me know what you think in the comments below.
Reporting for The Independent Republic, Ross Peili
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