Ethereum (ETH) seems to be under a lot of heat from regulatory bodies over its status as a “noncompliant security”. While this debate may not have much weight in the case of other cryptocurrencies, it holds a lot of significance in the case of Ethereum (ETH) owing to a sale of 60 million ether tokens by The Ethereum Foundation in July 2014. This sale raised 31,000 bitcoins valued at around $18 million. As the sale can be deemed a speculative launch that could lead to an increase in the value of Ethereum (ETH), this deal can be classified as an instance of security offering.
Just recently, Ethereum (ETH) was dealing with problems at home, rising from disagreements among developers over EIP999 which also created rumors of a hard fork in case a deadlock is reached with Parity Tech, one of the contributing software to the Ethereum (ETH) blockchain. Disagreements over how the operations of the blockchain are handled have also been on the rise with many developers complaining about too much centralization and constant tampering with the code.
ERC20 tokens built on Ethereum (ETH) are increasingly looking for exits to launch their own blockchain to avoid being dragged into problems with Ethereum (ETH). Just recently, TRON (TRX) announced that it will no longer be using the Ethereum blockchain. EOS (EOS) has made a similar announcement. This goes on to show that most crypto projects currently view Ethereum (ETH) as toxic and are trying to distance themselves from the coin and its problems.
On the competition side, projects like Cardano (ADA), TRON (TRX) and EOS (EOS) have increasingly been building their capacity to host ICOs and encourage developers to build Dapps on their platforms. EOS (EOS) announced recently that it is distancing itself from Ethereum blockchain because it aims to become an Ethereum competitor. Most investors already see other crypto projects like EOS (EOS) as better alternatives which are more easily scalable and do not come with much problems. Ethereum Classic (ETC) is another coin which has strived hard to preserve the true vision of Ethereum and still receives a lot of respect from loyal Ethereum believers in immutability and transparency, despite Ethereum Classic (ETC)’s failure to project itself as an Ethereum (ETH) competitor.
On the technical side, things do not look good either at least for now. The price seems to have been stretched too far on the ETH/USD weekly logarithmic chart. This can be attributed to the fact that many actually believed that flippening (ETH overtaking BTC in market cap) could occur during the recent Bitcoin (BTC) drop when Ethereum (ETH) held most of its gains. While that may have projected Ethereum (ETH) as invulnerable at the time, markets tend to follow established patterns and it seems likely that Ethereum (ETH) will complete its correction while the rest of the market recovers. In the light of recent developments, it appears that regulatory problems might actually accelerate that correction at the end of which Ethereum (ETH) might find a solution to its legal status and continue its upward journey. However, it is likely that Ethereum (ETH) will lose most of its market share to its competitors before that happens.