Ethereum News Update
Given the ongoing slide in cryptocurrencies, it seems a terrible time for optimism. But I can’t help it. Ethereum prices are holding up better than some of the others, making it a safe-haven crypto asset during these troubled times.
This could lead to the fabled “flippening,” whereby Ethereum replaces Bitcoin as the market leader. It is a game-changing prospect. But before I get ahead of myself, let’s cover some of today’s leading stories.
- Markets try to fix initial coin offerings (ICOs). One of the world’s leading crypto exchanges, Bittrex, unveiled new rules for tokens listed within the U.S. The exchange plans to remove all sub-standard tokens and enforce the rules on new issuances. But don’t worry about suddenly losing your money; Bittrex will wait till the second Friday after each decision to delist tokens. This gives investors enough time to sell their holdings. (Source: “Personalizing Transactions,” Digital Money Forum, January 9, 2018.)
- Governments try to fix ICOs. While Bittrex is aiming for a market solution to the problem of unreliable ICOs, government bureaucrats might take a different approach. In fact, the heads of the SEC and CFTC are testifying at a Senate panel next week. They are expected to voice concerns about ICOs and, in turn, formulate a plan for regulating these new assets. We know this because they published a joint op-ed in The Wall Street Journal last week. (Source: “Regulators Are Looking at Cryptocurrency,” The Wall Street Journal, January 24, 2018.)
- Green in a sea of red. ETH prices stood firm against the U.S. dollar on Thursday morning, rising 0.40%. This brought the Ethereum to USD exchange rate to $1,110.88 (at the time of writing). Meanwhile, other leading cryptos were down as much as 27%.
Of the two approaches to ICO regulation, Bittrex has the softer solution. It is creating a “best-practices” for the industry, which provides investors with the assurance of a garbage-free exchange. The SEC and CFTC might take a harder stance, requiring endless compliance.
But none of these is the big story. That is reserved for the ETH/BTC ratio, which diverged sharply from the ETH/USD in January. Just take a look at this Ethereum price chart:
Do you see what’s happening? Money is draining out of most cryptos, including Bitcoin. Yet Ethereum is holding still. It is the bulwark against the tide of pessimism. And that is why its importance within the world of blockchain is rising.
We can see this story in the BTC dominance metric. Bitcoin has fallen to 33.3%, while ETH has risen to 22.12%. They are trending in opposite directions.
I understand the current slump looks gloomy from a distance. But if it hastens the long-awaited “flippening”—whereby investors make ETH the ultimate safe-haven asset—then it’s worth the destruction. And also, it could mean that our $1,500 Ethereum price forecast for Q1 and Q2 is very conservative. Keep an eye on these trends.