The price of Ethereum (ETH) dropped to $123 from $142 in the last 48 hours, which is more than a 10% drop against the dollar. At the start of the year, the coin was trading at $130 across all cryptocurrency exchanges. The latest drop leaves the coin in the net negative this year, in contrast to Bitcoin’s 70% performance in 2019.
The worst part is that the coin is still 91% down from its record high of $1,450. The coin reached this peak during the initial coin offering (ICO) craze between 2017 and 2018. Since then, bears have hit Ethereum harder compared to Bitcoin.
Why ETH Has Been Declining
The main reason why ETH has suffered is because of the underperformance of altcoins as Bitcoin continues to dominate the market. So far this year, BTC accounts for 72% of the crypto market, up from 33%. Since ETH is the largest altcoin, it has been the most affected in this Bitcoin-centric market.
Equally, the coin also experienced significant selling pressure resulting from the PlusToken Wallet crypto scam. A report from blockchain analytics company Chainalysis indicates that scammers have been liquidating several millions worth of ETH and BTC in recent months. Although authorities have apprehended most of this, the issue has been pushing prices lower. The situation worsened because ETH is a more liquid market compared to BTC, and, therefore, the PlusToken liquidations contributed to the decline.
There is Still Hope for ETH
Even though the coin has experienced declining prices, some are of the opinion that its fundamental trend is still positive. According to reports, ReaIT, a real estate platform that works with blockchains and Ethereum, has sold its first-ever tokenized property on Ethereum. Also, decentralized finance has been growing rapidly and as a result, derivatives and the opportunity to get decentralized financial services are attracting more users.
Equally, Fidelity Investments recently indicated that it will add support for Ethereum services via its crypto branch, Fidelity Digital Assets. Tom Jessop, the president of Fidelity Digital Assets, stated that they are planning to add support for the asset sometime next year.
Featured image: DepositPhotos © Violka08
Joseph Spezzano received a Masters Degree in computer science from The University of Massachusetts. Joseph has been working as a full-time blockchain programmer for the past 5 years. In his spare time, Joseph enjoys writing for CryptocurrencyInvestments.com and traveling.