Within the past 24 hours, the price of Ethereum’s native currency Ether increased from $285 to $315, surpassing the $300 margin for the first time since September 12.
On September 1, the price of Ether closed on the $400 region, surging to $390 at its peak. But, as CCN.com previously reported, the Chinese government’s imposition of a nationwide ban on initial coin offerings (ICOs) triggered traders and investors to panic sell Ether, the currency of Ethereum that operates as the base protocol for ICO projects and tokens, allowing the price of Ether to fall from over $390 to $198.
Within two weeks after the declaration of ICOs by the Chinese government as an illegal fundraising method, the price of Ether plunged by almost 50 percent.
Ethereum is Beginning to Recover From China ICO Ban
As bitcoin and the entire cryptocurrency market did, Ethereum has already recovered to a certain extent from the ban on ICOs and cryptocurrency trading platforms by the Chinese government. The suspension of leading cryptocurrency exchanges in China including BTCC, OKCoin, and Huobi also negatively impacted the price of Ethereum because it eliminated the probability of Ethereum trading being introduced to the Chinese cryptocurrency exchange market in the foreseeable future.
But, traders and investors in the cryptocurrency market came to a realization that China is not a major market in the cryptocurrency exchange market and industry, as it only accounted for 10 to 13 percent of global cryptocurrency trades. It was a major market for certain cryptocurrencies such as Bitcoin Cash and Litecoin but other markets such as the US, Japan and South Korea have consistently demonstrated larger trading volumes.
More importantly, ICO campaigns and blockchain startups have simply begun to isolate the markets of the US and China, prohibiting investors from the two regions in investing in ICOs. Already, ICO campaigns and crowd sales have blocked investors with IP addresses from China, eliminating any potential legal conflict that may arise with Chinese financial regulators.
ICO is Only One Market of Ethereum
ICO is a major market for Ethereum but it is also one of many markets for the $28 billion blockchain network. Previously, JP Vergne, the professor at Ivey Business School, famously stated:
“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it.”
Over the past few weeks, with the imminence of the Metropolis hard fork, and Ethereum co-founder Vitalik Buterin and Bitcoin micropayments solution Lightning co-author Joseph Poon’s Ethereum scaling solution Plasma, the cryptocurrency community’s anticipation on Ethereum has been increasing at a rapid rate.
More to that, a growing number of multi-billion dollar conglomerates including Japanese telecommunication giants have joined the Enterprise Ethereum Alliance, with the vision of implementing and commercializing Ethereum-based applications.
The Ethereum Foundation is at an optimal situation wherein the demand toward the technology is rising exponentially and it all it has to do is scale the blockchain network to address the growing demand and provide necessary infrastructures for decentralized applications.
As the cryptocurrency market recovers, it is likely to see Ether returning back to the $400 region, as other cryptocurrencies bitcoin also record major gains.
Last modified: May 21, 2020 9:13 AM UTC