Ethereum News Analysis
Two seemingly contradictory things are happening in cryptocurrency markets: 1) Valuations are shrinking, and 2) Blockchain adoption is growing. These trends appear to be in conflict.
What exactly is going on?
Well, the first thing to remember is you’re not in a nightmare. Ethereum prices are truly trading below $400.00, scary as that might seem. Second, it’s possible for markets to be wrong in the short term. And third, it’s possible for markets to be wrong more than once in a row.
Let me explain…
Some people claim that cryptocurrencies went through a bubble in late 2017. “It’s TulipMania all over again! It’s the South Sea Bubble! It’s the Dotcom Crisis!”
You’ve probably heard some version of this argument made in forums and on blogs.
What this argument says, in so many words, is that the current slump is not a slump at all; it is a necessary correction toward sanity. It says the bull market was wrong.
There’s some truth to this argument.
After all, there was irrational exuberance. There were some cryptocurrencies that, like a winter coat in Hawaii, offered absolutely no value. But that’s to be expected when something new comes around. It’s happened time and time again in history.
Think of the California Gold Rush. Prospectors came from far and wide to make their fortunes, leading to an emergence of the Wild West.
In that loose order, there was no such thing as property rights; you either put the land to work or else it was seized by others who would.
The same thing was true for the Internet. It was a digital Wild West. In the chaos and hysteria of those early days, investors got drunk on their own optimism and caused a massive stock market bubble.
But can I tell you a secret? Neither of those scenarios ended 100% badly. Some people did get rich from the gold rush, just as some people did get rich from stocks that escaped the dotcom bubble. Why? Well, because not 100% of dotcom stocks were bad.
In other words, the market swinging too far one way is “wrong.” But swinging just as far in the opposite direction is “wrong” as well, because it gives credence to the idea that all cryptocurrencies are equal. They are, most emphatically, not.
I believe Ethereum is one of the few cryptocurrencies that (in the long term) can make it out of this disaster. However, we are in the process of revising our 2018 Ethereum price forecast.
Whereas we had previously estimated that Ethereum prices would reach $1,500 by the end of Q2, the steep crash in ETH prices has forced us to re-consider our time horizon. More information will follow in tomorrow’s Ethereum news update. Stay tuned.