Ethercoin Price Falling– Are Investors Rightfully Disillusioned?

Journalist:
Josiah Wilmoth @Y3llowb1ackbird
October 19, 2014

Ethercoin is an asset backed by the Ethereum project’s ethers, which Ethercoin developers purchased during the Ethereum presale. Assuming the developers fulfill their promise, ethercoin holders can redeem their coins at a 1:1 ratio for ethers once the Ethereum project official launches its blockchain. Since its launch, the ethercoin price has been incredibly volatile, bringing huge price swings almost every day. Nevertheless, the ethercoin price has been trending downwards.

This price decline might tempt traders to invest on speculation, but investing in Ethercoin is a bad idea.

Also Read: Ethercoin Raises Fundamental Questions about Trust in Altcoin Developers

Ethercoin Price Trending Downwards

From October 11-14, the Ethercoin price fluctuated around 176,000 satoshis. On the 14th, the ethercoin price briefly crashed to ~100,000 satoshis. By the next day, it had recovered to ~161,000 satoshis, but it fell back to the 100,000 satoshi mark on October 16. But it soon recovered again, rising to more than 200,000 satoshis. However, on October 17 the ethercoin price reversed course again, returning to ~172,000 satoshis. October 18 brought another price crash, reducing the ethercoin price to its current price of 100,212 satoshis.

The Ethercoin price has been volatile since its launch, but it appears to be trending downwards. Chart from CoinMarketCap.

Analysis

Ethercoin is an asset backed by ether, which does not exist yet itself.

The 100,000 satoshi mark proved to be a floor for the ethercoin price during the past week. Despite falling there several times, buy pressure has always returned the ethercoin price to pre-crash levels. Nevertheless, the ethercoin price is trending downwards. As the CoinMarketCap chart above indicates, the ethercoin crashes became deeper throughout the past week. The reason the ethercoin price is so volatile is that the coin suffers from low volume. In fact, only $5 in ethercoins have changed hands in the past 24 hours (per CoinMarketCap).

It is unclear how increased trading volume will affect the ethercoin price, but low prices may tempt investors who missed out on the Ethereum presale. However, the Ethercoin project carries a great deal of risk beyond ordinary altcoin investments, and consequently investors should stay away from Ethercoin.

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Disclosure: The author is paid in and holds investments in bitcoin. He is not invested in or affiliated with any of the altcoins discussed in this article. Any advice contained in this article is solely the opinion of the author and does not reflect the views of CCN. Neither the author nor CCN is liable for your investing decisions, so do your homework and never invest more than you are willing to lose.

Images from Shutterstock.

Last modified (UTC): October 20, 2014 02:14

Josiah Wilmoth @Y3llowb1ackbird

Josiah is the US Editor at CCN, where he focuses on financial markets. He has written over 2,000 articles since joining CCN in 2014. His work has also been featured on ZeroHedge, Yahoo Finance, and Investing.com. He lives in rural Virginia. Follow him on Twitter @y3llowb1ackbird or email him directly at josiah.wilmoth(at)ccn.com.