2020-6-17 13:00 |
In 2018, Ethereum rallied as high as ~$1,430 on the back of an influx of demand caused by the then-ongoing initial coin offering (ICO) boom.
ICOs had to raise money, and ICOs often raised money so through ETH — a widely-adopted, well-known, and easily-accessible cryptocurrency. Hence, the demand for Ethereum spiked as investors began to speculate they could multiply their Ethereum by trying their hand at early-stage crypto startups.
With ICOs now bust, one of the cryptocurrency’s biggest demand drivers is gone. Avi Felman of BlockTower Capital recently went as far as to brand the all-time high price ETH reached a “red herring,” citing the unique and now-defunct dynamic that pushed the asset higher:
“The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that).”
The ETH all time high price is likely a red herring, and was driven by a very specific dynamic (buy ETH to place in ICOs, no sell pressure because ICO treasuries didn’t think about that). BTC had no such dynamic. When BTC reaches its new ATH hard to see ETH anywhere near its ATH
— Avi IS RIGHT (@AviFelman) June 15, 2020
Yet a promient analyst has postulated that demand for Ethereum will eventually hit a new all-time high.
Related Reading: Buying Bitcoin at $8k or $9k Won’t Matter in 2 Years: Fund Manager Explains What Could Drive Ethereum Demand to Fresh Highs In the Coming CycleIn a recent Twitter thread, a top trader revealed a confluence of reasons why the demand for ETH will reach a new peak.
His attempt to do so comes as sentiment has been shared by certain traders and commentators that ETH’s golden era is long passed.
Some of the reasons the trader listed are as follows:
DeFi services are going “parabolic,” which should eventually lead to a spike in ETH demand. The ICO boom is unlikely to be the only ever macro driver of demand for Ethereum. The Ethereum 2.0 may make “every other blockchain redundant,” causing a surge in demand for ETH as demand for blockchains may rise. ETH’s gains were actually relatively muted in 2017 compared to some other coins like XRP and XVG, potentially imbuing the altcoin will potential to rally even higher in the next cycle. “More altcoins saw larger returns without any real chain activity or metrics. We could say ETH was a fair value for the 2017 period,” the trader explained. Not Everyone Is Convinced ETH Is a Good InvestmentThese catalysts may be bonafide, but not everyone is convinced that Ethereum is a viable investment.
Galaxy Digital’s Michael Novogratz wrote in February that Ethereum remains in a “proving phase.” To him, the cryptocurrency and underlying blockchain do not yet have a killer use case like Bitcoin has being “digital gold.”
1. GLXY is a big investor in Ripple Labs. I would like to see them do well. @bgarlinghouse has done a great job as ceo. I commented the XRP tokens underperformed $btc last year because Ripple owns a lot of them. I have been almost solely long $btc for the past 15 months.
— Michael Novogratz (@novogratz) February 6, 2020
The calls for caution when dealing with the altcoin has been echoed by Jeff Dorman, CIO of Arca. He explained that because Ethereum is so closely correlated with Bitcoin and smaller altcoins at the moment, investing in ETH is useless.
Related Reading: Bitcoin Hash Rate Recovers to Pre-Halving Levels, But a Chinese Mine Just Burned Down Featured Image from Shutterstock Price tags: ethusd These 2 Factors Suggest Demand for Ethereum Could Set a New HighSimilar to Notcoin - TapSwap on Solana Airdrops In 2024
ICOS (ICOS) на Currencies.ru
|
