At press time, the second-largest cryptocurrency by market cap and the number one competitor to bitcoin is trading for $418. This is roughly nine dollars higher than where it stood 24 hours ago.
This is special news considering Ethereum has been down in the dumps for the past few weeks. The currency was hovering in $470 range early last week but has since been marred by an extensive array of slumps that took it down to $409 just yesterday – the lowest it’s been since early July.
What’s also important is that Ethereum is moving in the opposite direction of bitcoin and most major cryptocurrencies, which at the time of writing, are deep in the red. Bitcoin, for example, has fallen to about $7,485 when it was trading for well over $8,000 just last week. Litecoin has also dropped down to about $77, while bitcoin cash is drudging along at $724 – a major drop from last week’s $833.
Is Ethereum recovering, or is a nine-dollar spike something enthusiasts should just dismiss? It seems co-founder Vitalik Buterin isn’t terribly worried either way, recently mentioning on Twitter that traders have reached the end of a “crypto bubble.” He explains that while cryptocurrencies reached all-time price highs in 2017, that momentum was unsustainable, just as the dot-com bubble was unsustainable in the mid-90s. Ethereum is simply going through a correction, but that doesn’t mean it’s about to fade away completely.
More initial coin offerings (ICOs) are launching on the Ethereum network than on any other blockchain available today, primarily due to the accessibility of the ERC20 protocol. Right now, most investors are experiencing the urge to sell, though a price boom could potentially occur again considering the latest developments behind the MEW update and Coinbase’s plans to accept ERC20 tokens.
One interesting piece of information stems from a new token specifically designed to short Ethereum. The token comes by way of dYdX, a decentralized financial derivatives startup, and offers investors a chance to increase their bets against ether coin and related forms of crypto. The company recently closed a $2 million seed round led by some of the financial industry’s leading figures including Andreessen Horowitz and Coinbase CEO Brian Armstrong.
dYdX founder Antonio Juliano explains:
“The main use for cryptocurrency so far has been trading and speculation – buying and holding. That’s not how sophisticated financial institutions trade. The derivatives market is usually an order of magnitude bigger than the spot trading or buy/sell market. The cryptocurrency market is probably on the order of $5 billion to $10 billion in volume, so you’d expect the derivatives market would be ten times bigger. I think there’s a really big opportunity, there.”
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