, the second biggest cryptocurrency when looking at market capitalisation has quickly become the blockchain of choice for ICO’s, software developers and programmers, but yet, Ether significantly underperformed its counterparts during the later stages of the first quarter.
It started as the best performer of the first quarter, having only lost 40.9%; however, in March alone, the price fell by a huge 54.9%, making it the worst performer when looking at the top five cryptocurrencies
One of the reasons that Ethereum is so popular is because it is just so flexible and efficient, which is why these latest statistics seem just so odd. Just a couple of weeks ago, Ether investors got a bit of scare when Buterin threw around the idea of charging fees to those who stored data on the network. Jeff Koyen, who is president of 360 Blockchain USA, speaks about how they are effectively a victim of their own success saying;
“The irony, of course, is that crypto is facing many of the same problems of many traditional start-ups. It’s a victim of its own success – you can grow at a loss for only so long. Someone has to pay the electric bill.”
On top of this, Ethereum are facing the same regulatory threats as other cryptocurrencies as well. Jay Clayton the chairman of the Securities and Exchange Commission said;
“I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story.”
Many ICOs have been labelled as scams in the past few months, which has created a lot of distrust and uncertainty, which has ultimately affected the value of cryptocurrencies. Finally, another issue that Ethereum are facing is the selling pressure that is coming from the successful ICOs. Tim Enneking, who is founder and managing director of Crypto Asset
“It’s the live companies that have the Ether, not the failed ones….These companies have expenses in fiat and are having to sell Ether to pay for them. They aren’t great traders and selling it into a already falling market is exasperating the fall.”