At the end of spring 2017, all eyes were on the rising price of ETH and the great standing of the entire P2P blockchain system that is enforcing the ethereum network. This is why the cryptocurrency began this year below $10 and at one point reached the value of almost $400, growing by more than 2000% in a time period shorter than six months.
But, with the start of the summer, the climb of ETH started to slow down and stabilized around $350 with sporadic rises and falls, but none of which really changed this average value. However, the change in value did occur at the end of June when the price of ETH began to fall with a steady downward trend.
Then, less than 24 hours ago, the big crash began that took the cryptocurrency below $200 in a very short time period. Now, in the wake of this, the traders and investors are left struggling what to make of the movement in the market and how to prepare for the upcoming period, whatever it might entail.
The drop brought down the cryptocurrency to below $200, which is the first instance of returning to this level since 30th of May 2017. During the trading day, the lowest point was reached at around $190, signaling a drop in the value of 17% that took place in this period. After that, the price continued to correct itself in the coming hours, bouncing to $210 but then coming back to below $200. All of this makes for a more than 50% slump since the all-time high.
At that point, a lot of excitement related to the cryptocurrency was directly connected to the ICOs which were only starting to present itself as a business opportunity. This, coupled with the mainstream media focus that was provided to ETH made it rise more aggressively than it was really sustainable for a longer period than just a couple of weeks, as many predicted.
Now, it appears that their predictions have been proven right as the correction still seems to be ongoing. As of now, it is difficult to assess where the price would stabilize, but it is certain that it will not bounce back quickly or nowhere near the levels from which the drop began (the $350 domain). However, while the fall in value is definitely not something that the day traders are happy about, it still does not represent an overall issue that could be gripping the ethereum network.
For the proponents of ETH in general, the drop is unfortunate, but not in any way indicative of a larger problem in the network. Instead, most of them point out that bitcoin, which is used for many online financial interactions, including gambling with BTC, is still the inferior network when it comes to its design and usability.
This allows many traders chose to stay optimistic about the future of the network and its viability as an investment opportunity. While the price is slumping at the moment, many still prefer ETH as a more stable cryptocurrency domain, especially when compared to the main heavyweight champion at the moment – bitcoin.
One of the key reasons why ethereum still has so many of those who are betting on it is the bitcoin’s upcoming sailing issue. With two opposing BTC camps being resolved not to flinch and give way to the solution from the other side, the possibility of bitcoin fracturing remains a real alternative.
Naturally, if this does occur in a few weeks, the current ETH instability will look like a small local storm compared to a category-five hurricane. There is no way how the same splitting could impact the price of BTC in any positive shape or form, aside from the fact that it is a completely unknown territory.
Right now, even those well-versed in the dealings of the network and the entire BTC community are in the dark when it comes to the fallout of the system splitting into two digital currencies. While ethereum’s example shows that it is possible for this to occur and for both new cryptocurrencies to continue to function, the market impact would be devastating.
At that moment, without any doubt, the so-called flippening would occur, with the ETH taking over as the biggest digital currency in terms of market cap. If that would happen, the value of the ETH would almost instantly skyrocket.
While some investors might be gunning for the flippening to happen on the residue of BTC splitting, the smart money is best invested in digital currency ecosystem that is for the most part stable. The skyrocketing of ETH value would last for some shorter or longer period, but the instability on the long-term generated by the split of the biggest network would remain in the minds investors, as well as the general public.
The logic behind the new fear would be simple – if the biggest cryptocurrency, one that managed to survive a range of misfortunes over almost a decade split over a squabble in the actual community, why could not the same happen to any other? With this simple, but poignant idea, no amount of experts and tech explanation could completely subdue this fear.
This might sound catastrophic, but the entire notion of confidence in digital currencies would be shaken to the core with the BTC split. Naturally, the concept of digital currencies is not going anywhere, but the growth and adoption could be set back by years if not a decade with this event. That is why it is hard to imagine ETH that is going strong in the long period after the initial movement of funds from the new BTC networks stops.
Ideally, the ETH rebound will occur in the setting later this year where the BTC had not split into two networks. The flippening, if it even comes in the near future, should occur on the basis of ETH being seen as strong and not as BTC seen as weak or failing. Any other alternative might boost the price of the ether, but in the long run, it will not bring about anything good for the cryptocurrency ecosystem.