In 2017, during the cryptocurrency bubble, a number of projects launched tokens for a wide range of payments. It was easy because what was needed to raise millions of dollars through an initial coin offering was just an idea. During the period, Ethereum and its native token Ether (ETH) reached a record high because of frenzy around trend words like “smart contract” and “ICO.”
Hype on ETH Waned Because of Scams and Bad Ideas
The flurry witnessed eventually waned and the price of ETH, which hit a record high against the US dollar at the beginning of last year, has dropped significantly by 86% since. Comparable against Bitcoin, Ether, which reached its record high in June 2017, is down more than 85% against Bitcoin since 2017.
There was optimism that ETH would at some stage overtake BTC, but the flippening hype has since waned because most of the tokens that were launched on Ethereum platform in 2017 turned out to be scams or bad ideas. Equally, it was not clear why a project that had its own crypto built on the platform would lead to an increase in the value of ETH.
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At the beginning of this year, most ICO projects shed ETH onto the market each month, and this means a considerable amount of ETH was being removed from the market and put into ICO vaults. And once the hysteria stopped, so the demand for ETH also declined.
DeFi: The New Talking Point Among Ethereum Enthusiasts
For Ethereum enthusiasts currently, the main talking point is Decentralized Finance (DeFi), but it appears that it has not managed to compensate for the supply side increase resulting from ICO projects that are dumping their ETH. There are lingering hopes, however, that ETH will likely outperform BTC when the next Bitcoin rally begins, even though Bitcoin has almost tripled its price in 2019.
Despite ETH performing poorly against Bitcoin in recent times, some of the tokens built on the platform, such as Link, have edged Bitcoin in the past few months.
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