Ethereum Price Forecast: Japan, City-Based ICOs, and Scared Banks

ethereum priceEthereum News Update

There’s a lot of Ethereum news this morning, so I cherry-picked the three most interesting stories I could find. One of them, in particular, might affect our Ethereum price forecast.

Before I get to those stories, however, you should probably know that ETH prices are down 1.95% against the U.S. dollar. The Ethereum to USD exchange rate was near $867.86 at the time of writing.

On a more positive note, Ethereum’s trading volumes are relatively stable, suggesting that investors aren’t abandoning the cryptocurrency for greener pastures. The trading volumes are also dispersed across a wide range of countries.

But I digress.

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Back to the day’s news:

  1. Japan inches toward more regulation. The Financial Service Agency in Japan is getting worried about the rise of initial coin offerings (ICOs). In fact, it is seriously looking at amending existing laws to regulate the industry, which could dampen investor sentiment in one of the most important crypto markets in the world.
  2. Cities might raise money through ICOs. Berkeley, California is having financial troubles at the moment, and two municipal officials think it might be a good idea to issue municipal bonds via a token offering. Here’s the reasoning, à la councilman Ben Bartlett: “Essentially, we would like to explore some new ways of financing because we have terrific needs, and we are concerned about our ability to fulfill our moral and legal obligations for our residents here.” (Source: “To Fund the Resistance, Berkeley Turns to Cryptocurrency,” CityLab, February 12, 2018.)
  3. Banks are getting scared of cryptos (finally). Both JPMorgan Chase & Co. (NYSE:JPM) and Bank of America Corp (NYSE:BAC) have listed cryptocurrencies as potential business risks. This is a surprising twist given that Jamie Dimon recently called Bitcoin a “fraud.” From one perspective, this reveals the growing stature of cryptocurrencies. On the other hand, it suggests that banks will move into a more defensive posture. I intend to keep a close eye on this trend.

Ethereum Price Chart ethereum price chart for 28 feb

Of these three developments, I find the city-ICO announcement most engaging. Berkeley is a refuge of liberal politics. That it would seek to experiment with ICO funding speaks more to the alluring power of cryptocurrencies than anything I can possibly write.

Analyst Take

Despite the current slump in ETH prices, I see no real diversion from long-term trends. As such, we maintain our $1,500 Ethereum price forecast for Q2.