Starting its life as an open-sourced, transparent blockchain, Ethereum has gained a reputation due to its professional use by the likes of JP Morgan among countless new disruptive companies. The first quarter of 2018 has seen all major cryptocurrencies endure a burst bubble.
This crash has since seen its counterparts (BCH and XRP) fall between 65% (BCH) and 73% (XRP), with Ethereum getting off lightly by comparison with a 40% fall this month. But while Ethereum did get off lightly in terms of the bearish turn. It's currently sitting around the $400 mark with all the potential of falling once again.
The flexibility its blockchain offers in terms of creating new assets via ICOs has lead to its rapid growth. According to the founder of Blockchain 360, Ethereum may be succeeding itself to death:
"It’s a victim of its own success — you can grow at a loss for only so long. Someone has to pay the electric bill."
Underrated and Undervalued: What's sinking the Ethereum?
The large number of startups utilising Ethereum Blockchain for its business model. Success or Failure will cost them spectacularly, especially with the SEC breathing down the necks of numerous ICO's.
And with a lot of these start-ups being powered by Ethereum, it means that any expenses on their side require a sell-off the Ether that their system is based on top of.
“It’s the live companies that have the Ether, not the failed ones….These companies have expenses in fiat and are having to sell Ether to pay for them. They aren’t great traders and selling it into an already falling market is exasperating the fall.”
The difficulty is that while it has pushed above the $400 mark once again. Any sell-off from an ICO, whether successful or not, will hit investor confidence within the Ethereum market.