The last few months have been rather stormy for the Ethereum price, and indeed the entire cryptocurrency niche. Overall, it has been a hugely successful year for Ethereum, yet the Ethereum price has receded quite significantly in the last few days. Many are beginning to question the long-term viability of the cryptocurrency concept, and Ethereum will certainly face challenges in the coming weeks and months.
Aside from legislation, particularly concentrated in East Asia, which is impacting on the value of cryptocurrencies, there is debate over whether the recent World Economic Forum in Davos could impact on the Ethereum price. This talking shop features some of the world’s wealthiest and most powerful people, and has been known to have a serious impact on numerous markets, regardless of the feelings of outsiders to this elite confab.
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It’s already known that the cryptocurrency market has been a major topic of conversation at the Davos conference this year, and there are two particular areas that could strongly impact on Ethereum. The first is a meeting dubbed “The Remaking of Global Finance,” while the second will see attendees discuss the “Crypto-Asset Bubble.”
Some of the biggest names in the world of finance will thus be discussing the Ethereum price alongside other cryptocurrency issues, and there is no doubt that this will have a massive influence on the market going forward.
Unfortunately for those backing the cryptocurrency concept, the noise coming out of the Davos confab has been largely negative towards Ethereum and other similar systems thus far. For example, Christine Lagarde, CEO of the International Monetary Fund, has expressed concerns over the potential for cryptocurrencies to be utilized for criminal activity.
“The fact that the anonymity, the lack of transparency and the way in which it conceals and protects money-laundering and financing of terrorism and all sorts of dark trades, is just not acceptable,” Lagarde asserted.
It is not hugely surprising that the existing financial elite is opposed to new kids on the block such as Bitcoin and Ethereum. But the tone of comments coming out of the Davos conference is undoubtedly negative for Ethereum prices going forward.
This is particularly true considering that both the Ethereum price and Bitcoin price have fallen on the back of obstructive legislation passed in East Asia. Both South Korea and Japan have put regulations in place that have impacted negatively on the cryptocurrency niche, while the Chinese government has already spoken out about the potentially destabilizing effect of such payment solutions.
There has been no explicit move to regulate cryptocurrencies in the West, but there has been suggestion of this at Davos, and major political figures have spoken of the need to deal with Bitcoin and Ethereum more carefully. However, it is also important to note that the establishment is not necessarily against blockchain activity in itself, with some praise for the concept emanating from the World Economic Forum.
Indeed, platforms such as Ethereum and Ripple in fact offer the potential to revolutionize the way that the traditional banking industry operates. This could see support from the economic aristocracy, which could have a more than positive impact on the Ethereum price. Bitcoin would certainly be cut out of any such favouritism, as its ethos is fundamentally opposed to the basic mentality of the mainstream banking system.
In this sense, in the long-term Ethereum may benefit from the relatively positive view that economic insiders have on its operation and organization, and this could even see the second-largest cryptocurrency overtake Bitcoin in the future.
Nonetheless, for the time being the Ethereum price climate represents undoubtedly choppy waters, with other cryptocurrencies also struggling. 88 of the top one-hundred cryptocurrencies reported losses in the early hours of trading today, with Bitcoin, Ethereum and Ripple all suffering major losses.
This was primarily prompted by the ceasing of trading by a Tokyo-based exchange. Coincheck has given no explanation for this decision, but this unexpected activity has undoubtedly hampered Ethereum training. Hiroyuki Komiya, Chief Executive Officer of Tokyo-based Blockchain Technology Consulting, told Bloomberg that Coincheck is a “very well-known exchange” in Japan, and that people are “very eagerly awaiting to hear more detail.”
However, both Bitcoin and Ethereum recovered from the bad news, with Ethereum currently trading at around $1,050. This still means that Ethereum has enjoyed a massive upside over the last 12 months, even if the last few weeks in particular have been rather more challenging. While there is talk that the Coincheck decision has been taken due to some massive hacking operation, this has yet to be confirmed.
Ultimately, the long-term trend of Ethereum price will be dependent on its ability to establish itself as a unique value proposition. Bitcoin is currently valued at over 10 times the price of Ethereum, and will always be prominent due to creating the entire cryptocurrency concept.
If Ethereum is to seriously rival Bitcoin, it must establish yourself as a significant part of the mainstream financial architecture. This will require its creators to forge links with major banks and economic institutions, pushing Ethereum into the mainstream as a convenient way of conducting exchanges.