ICO on the Ethereum blockchain have become a major catalyst for the rapid growth of the price of the cryptocurrency last year. They seem to be the main cause of her fall. About it writes .the
On Monday, the rate of coins dropped by about 17 percent, which is the biggest drop Ethereum in March. For the first time since November last year, the asset is trading well below $ 300. For 2018 the Ethereum fell from 1377 to $ 267.
The First is the rapid growth of the cryptocurrency fell just on the wave of popularity of ICO, most of which were built on . To participate in the crowdfunding had to exchange the purchased broadcasts on token-ICO. Now, having accumulated a critical mass of coins, startups have begun to merge them at the market rate.
According to the CEO of a hedge Fund BloomWater Capital, team ICO need to cover the cost of initial development.
They were able to collect a lot of money, but not have complete idea about the correct disposal of capital. The result — a massive drain of Ethereum. Last year such tactics would have worked, but now the market has much less liquidity, which leads to strong pressure from the sellers.
At the peak of their prices Ethereum held approximately 32 percent of the total capitalization of the stock market. Some even predicted the Ethereum were to overtake Bitcoin in market capitalization.
Between bitcoin and similar projects, increasing competition. Investors are concerned that may soon be more technically perfect the project, which will be able to handle significantly more transactions. However, most startups do not even have a working product.
The Blockchain Capital LLC Analyst Spencer Bogart believes that investors are gradually recovering after the bubble ICO.
Investors are disappointed in ICO, most of which took place on Ethereum. We are now seeing the results of high expectations around crowdfunding.
According to the service , last month startups brought about 110 000 ETH coins on the market. A sharp drop in cryptocurrency also affected the total capitalization of the stock market — now it is below $ 200 billion.
Most of all, a massive drain Ethereum is not yet over. However, in the long run, the course of bitcoin will still grow as the project Vitalik Buterin still the most popular platform for crowdfunding and decentralised applications.
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