In spite of past downturns in which it usually fared well, this time Ethereum has been experiencing some significant drops over the past few days.
When crypto markets face another monthly crash some digital assets will do better than others. As always, Bitcoin sets the direction in which the prices go, and with an overnight drop of 14%, the prospect for all the other cryptos isn’t looking all that well.
Ethereum has done pretty badly this time, taking a harder and faster plunge than usual.This could be due to the ICO and crypto advertising bans that were imposed by Facebook and Google. ETH is also the second cryptocurrency that is traded after Bitcoin, so when investors start panic selling on altcoins, Ethereum will directly be affected by this move.
ICO’s Dragging Down Ethereum
Ethereum has been used as a platform for a huge number of ICOs over the past year. When these ICO’s face intense regulations, Ethereum is affected. Also, if advertising environments are closed off to start-ups looking to promote their blockchain projects, again Ethereum suffers indirectly. ICOs have been intensely scrutinized by regulators all over the world, mainly because of the way they raise their funds.
To protect investors from scams and fraudulent practices, governments have started the crackdown on unregulated ICO advertising and marketing. Social media and web companies have emulated this move, although their reason for doing so remains debatable.
For example, Google up until very recently, still allowed rogue ads that injected mining malware and phishing websites to function on its platform, but now it has decided to ban all crypto-related advertising. Facebook still has active accounts of deceitful members that distribute clickbait and scams even though they reportedly banned ICO advertising a few months ago. It is also believed that Twitter, another platform on which fake accounts are still being created, could follow in the steps of the Google and Facebook and ban crypto ads.
ETH Downward Slide
ETH hit its lowest point since early December when a huge rally boosted its price from $475 to $850 just a few days. ETH is currently trading around $585 and has steadily lost 16% in the past 24 hours, over the week accumulating a loss of 20%, and over the month a drop of 37%.
If this trend continues its price is very likely to go back to late November levels of around $450. But if you look at March 2017, Ethereum trading below $40, and investors are hoping ETH doesn’t get anywhere near that value in the future.