Earlier reported about the down turn in the cryptocurrency market, It has been going through a rough time and one of the worst impacted cryptocurrencies of the recent few days has been Ethereum. The price of the currency has sunk to the lowest point of 2018 yesterday when it went below the $265 mark. While it has seen some recovery and as of press time, it is trading in at $282, this was a major setback for investors. However, the price crash is now being over the fact that ICOs are cashing out.
It was largely believed that ICOs were responsible for the bull-run of Ethereum earlier this year, which at one point in crossed a market cap of $100 Billion. A majority of the ICOs which came up last year were built on ERC-20 tokens, meaning that Ether tokens were used by investors. Now, however, the situation is the exact opposite – and ICOs cashing out are being blamed for the fall in Ethereum prices, as reported by Bloomberg.
Considering that a majority of these ICOs were in the form of ERC-20 tokens and considering that the markets are falling, ICO-owners are now encashing the Ethereum and converting it into fiat money to ensure they don’t lose any more value.
Director of BloomWater Capital, Biswas Das, commented on this, saying:
“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the the market is so fragile that it causes a lot of pressure.”
ICOs have been performing really well over the past few years, despite of the fact that the cryptocurrency markets have been slowing down. The recently concluded EOS ICO which lasted for about a year managed to raise $4 Billion! When you look at the total amount of funds raised by ICOs in Q2 2018, the sum stands above $8 Billion!
Yesterday, we also reported about British MEP, Ashley Fox proposing regulations for the upcoming ICOs to avoid fake ICOs. These new regulations could solve the problem of fake ICOs and if put into proper use, could solve price crashes such as this one!
There’s no word from the Ethereum Founder and the community. The BlockPitch Team is getting in touch with them for their views and we’ll come up with a new analysis which would include views from giant cryptocurrency holders.
