“Should I buy Ethereum?” Asks crypto influencer Ben Armstrong, known in crypto space as @Bitboy_Crypto, to his nearly 800,000 followers. The second most popular cryptocurrency has been free-falling for a few days in harmony with Bitcoin, but at a more desperate pace.
Ethereum fell 3.45% to $ 3,080.48 on Monday’s final check, according to the coin desk. This is because the sector has been hit by concerns about rising interest rates in Kazakhstan and the shutdown of the Internet.
Hashtags #ethereumcrash and #ethereumdip are trending on Twitter, and crypto fans and skeptics are exchanging thorns over their rapid decline.
Ether’s price fell below $ 3,000 on Monday morning and bounced back a bit. After surpassing $ 4,100 on December 27, tokens ranged from $ 3,000 to $ 4,000 in the next few days. Ethereum last fell below $ 3,000 in late September, with strong moves, including a record high in November.
Why is Ethereum declining?
The combination of rising government bond yields, the stronger US dollar and the closure of major Bitcoin mining capacities in Kazakhstan last week were all combined to push down crypto prices.
Nevertheless, tokens, the second largest market value after Bitcoin, face many challenges.
The critics say the charges are high and transaction speeds are slow, as traffic is congesting the network and many blockchain developers are looking for alternatives. “ETH Killer” has emerged with developers building so-called decentralized finance (DeFi applications) using blockchain technology.
While these crypto networks want to gain market share from Ethereum, Ethereum supporters believe that competitors (Polkadot, Avalanche, Cardano, Solana) are still dependent on Ethereum. ..
Joey Krug, Co-Chief Investment Officer of Digital Asset Investment Company Pantera Capital, said: BloombergPlease be aware of security concerns. “I don’t know if they are best suited for new global financial payments.”
What now?
Ether rose almost 400% last year, rekindling speculation that it could someday exceed Bitcoin. Despite the slow slump, the ether is still in good condition. The price in January 2021 was just over $ 1,000, but some say the situation will soon improve.
Most NFTs, non-fungible tokens, and cultural phenomena throughout 2021 will be purchased on ethers that are easily converted to US dollars on exchanges such as Coinbase, Kraken, and Gemini.
Ethereum is the most widely used plate form for decentralized finance and other use cases. In October, when decentralized total locked total reached $ 245.5 billion, Ethereum More than half $ 150 billionAccording to the data collated by CryptoRank.
Unlike Bitcoin, which primarily functions as a payment network and cryptocurrency, blockchain networks such as Ethereum and Solana allow users to build apps that can store personal data, such as smart contracts that manage NFT ownership and sales. You can set rules for complex financial transactions.
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