The cryptocurrency market once again staged a "holocaust", but this time the protagonist is not Bitcoin, but other cryptocurrencies such as Ethereum. There was a big waterfall in Ethereum, which directly fell below $300, setting a new 9-month low. At the time of writing, the Babbitt app showed that ETH has fallen by more than 16% in 24 hours.
Bloomberg analysts explained today that the decline in the price of ETH was caused by the "cash out of ICO projects", pointing out that Ethereum is the "most popular" platform for blockchain startups to create applications and raise funds.
Bitcoin, which has always played a key role in the trend of the entire cryptocurrency market, is not the "culprit" of this plunge. According to data from CoinMarketCap this morning, among the top 100 cryptocurrencies, among all the falling currencies, Bitcoin has the smallest decline, only about 2%. However, as various cryptocurrencies continue to fall, even Bitcoin It seems that the currency cannot be independently supported. As of press time, Bitcoin quickly fell below the $6,000 mark, and the decline quickly expanded to 5%.
However, Bitcoin's resilience is still significantly stronger than other major crypto assets. The mainstream media today further contrasted with the mainstream financial industry: the currency crisis broke out in Turkey. Bloomberg pointed out today that “just as the currency crisis in Turkey is escalating, the price of the Turkish lira against the U.S. dollar has fluctuated more than Bitcoin in the past 10 days.â€
According to data from CoinMarketCap, Koinim, Turkey's largest exchange, reported that Bitcoin trading volume has recently increased by 63%, while trading volume on the BTCTurk and Paribu exchanges has increased by 35% and 100%, respectively.
At the same time, the entire crypto market is absorbing the impact of the US Securities and Exchange Commission (SEC) delaying Bitcoin ETF to September. The SEC's decision obviously weakened the price of Bitcoin, but because the decision was expected, the price of Bitcoin was quickly under control, but as the market prospects show, this impact also extends to the broader cryptocurrency industry.
Biswa Das, the operator of the cryptocurrency quantitative hedge fund BloomWater Capital, said that investors have pushed up the price of ETH by buying ETH to participate in the token sale. Blockchain project parties have raised a large amount of ETH in this way, and some projects are carried out in order to pay for the expenses. ETH cashed out and worried about being dragged down by this year's bear market.
Das said:
“These startups have raised a lot of money, but they don’t have financial management or sufficient cash management experience, so they sold ETH prematurely and put a lot of pressure on the market. Last year was good, but now the market is too fragile. , It will bring a lot of pressure."
Last year, during the heyday of Ethereum, the growth rate of this digital currency exceeded 100 times, from $10 to a high of $1,000. The market value of the entire cryptocurrency market once reached 32%, while Bitcoin was 39%. Some people once speculated that ETH is the most promising cryptocurrency currency that surpasses Bitcoin, but later showed that this conclusion was "indiscreet." Das said that those projects that raised funds at the top of the market were forced to sell the ETH obtained from the project's ICO to reduce market impact. He himself was helping startups sell ETH on multiple exchanges.
The combination of the pressure of ICO cashing out and the pessimism prevailing in the cryptocurrency market caused the total market value of cryptocurrencies to drop from a high of over 800 billion U.S. dollars in January to about 200 billion U.S. dollars now, due to market tightening of regulations and encryption. Concerns about slow currency adoption.
With the emergence of competitors, people worry that the Ethereum platform will not be able to withstand sufficient transaction volume to support mass-market applications, which also puts ETH under upward pressure this year. While raising billions of dollars, most ICOs have not yet come up with a viable product, and many projects are fraudulent or have security issues.
Spencer Bogart of Blockchain Capital LLC said,
“Investors’ illusions about tokens and ICOs are becoming more and more disillusioned. Most of these products were launched on the Ethereum platform. We have seen the price of this product continue to decline in the market.â€
Das said that startups may not fully cash out ETH. In the long run, the continued demand for establishing and holding ICOs on the Ethereum platform should cause ETH to rebound. Ethereum is still the most popular platform for startups to build blockchain-based applications because more than 90% of projects are using it.
For now, Bitcoin is still the most persistent cryptocurrency, but if the market drops further, can Bitcoin continue? What do you think?
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