In the absence of harmonized regulation, we see some exciting market behavior in the crypto space today, latching on to trends like scalable private chains, off-chain transactions (e.g., Ripple), and permissioned blockchains. Platforms like Ethereum Profit have unique features like a user-friendly interface, suitability for all traders, and unique tools for bitcoin traders. Crypto-space is undergoing a significant paradigm shift from a trustless public blockchain to an emergent trusted computing model designed for this new fabric of business relationships that also brings us closer to a decentralized economy.
Ethereum’s vision and mission
With the arrival of smart contracts, Ethereum has become a serious contender. Its ability to support Turing-complete applications is simply unique. People do not doubt that smart contracts will usher in an unprecedented era of automated contracts that will completely disintermediate contract law, data storage, and a worldwide web of trustless global markets.
Ethereum has undergone numerous price shifts recently, and not many traders or investors know what causes Ethereum to fall. So, let’s discuss the reasons behind the fall of Ethereum in the cryptocurrency market.
Ethereum Vision:
Ethereum’s vision is not only about creating decentralized applications (dApps) for computing analytical tasks. It also intends to facilitate the development of decentralized systems of code that can be agreed on by trusted parties and controlled through encryption algorithms. As the price of ether has risen, it’s become a much more viable investment option.
As a result, several “eth ICO” projects have popped up that try to capitalize on the new interest. One could argue that no one could predict how quickly Ethereum has grown and continues to rise in price. There are many types of Ethereum-related tech products, both centralized and decentralized.
Some projects aim to provide Ethereum-based software platforms for applications to run on top of them: like the Ethereum Enterprise Alliance (EEA), which promotes enterprise-centric blockchain technologies and standardization. Others take a more hands-off approach, focusing instead on innovation in areas like smart contracts.
Factors causing Ethereum to fall:
- Bad Press:
The cryptocurrency market is currently embroiled in controversy, with several high-profile figures—including Craig Wright accused of fraud. The price of Ethereum has climbed rapidly due to the growing popularity of Ethereum and ICOs (initial coin offerings). However, it started losing ground in mid-January when several companies were accused of fraud.
Ethereum has been accused of being a new form of pyramid scheme promoted heavily through social media platforms like Facebook and Twitter. In addition, recently, there have been a few cases of fraud due to the lack of rigorous regulations in cryptocurrency, which has resulted in adverse publicity for the Ethereum blockchain.
- Regulatory framework:
Ethereum’s decentralized nature is its biggest strength but it also makes it vulnerable to hacks and scams. With the increasing popularity of its currency, Ethereum (ETH/USD), there is a lot of speculation about how Ethereum could be regulated. How people could regulate has been a big question for the community.
The SEC (U.S Securities and Exchange Commission) warned that trading in cryptocurrencies such as bitcoin and ether should be considered highly risky, especially about ICOs (Initial Coin Offerings). Moreover, China’s cryptocurrency crackdown of 2021 led to the most significant digital currency market being abysmal.
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Technical glitches:
The cryptocurrency market has witnessed some technical glitches in the past few weeks, with the Ethereum blockchain going down. The current price trend is also indicative of this recent drop. As Ethereum gains popularity, it’s also starting to attract more attention from developers, investors, and regulators. As a result, it might be hard for it to sustain its meteoric growth.
Scalability has been a concern for the Ethereum blockchain and Bitcoin for quite some time. However, with more and more people using Ethereum, the blockchain is starting to get congested with too many unconfirmed transactions. As a result, the transaction time has gone, resulting in higher transaction fees.
Ethereum boasts greater “scalability” than Bitcoin, although this is not without its challenges due to the network having to incorporate more transactions per block. In addition, the recent law enforcement crackdown on fraudulent coin offerings (ICOs) has caused many developers to steer clear of Ethereum for their ICOs.
- Market adoption:
One of the biggest challenges Ethereum faces today is the lack of adoption by big companies and institutions. If a company like Google or Facebook adopted the platform, it might give it the push it needs to reach mainstream adoption. Until then, investors are not too keen on making big bets on crypto that don’t have any significant use cases.
The cryptocurrency market space is becoming increasingly crowded, given that new cryptocurrency and blockchain projects are coming up daily. Over $ 1 billion has been raised through ICOs this year, and many more projects are still in the pipeline.
Several startups are working on creating platforms where they can launch their own ICOs and access the Ethereum blockchain. However, the scalability issues that Ethereum is facing right now might make it hard for companies to rely on it with all its current problems.
Ethereum isn’t without competition, as several other blockchain-based platforms could be a potential alternative to Ethereum. Nevertheless, one of the most significant recent causes of Ethereum is to fall.