Ethereum is experiencing its First-Ever Bear Market

Ethereum is experiencing its First-Ever Bear Market

Ethereum is experiencing its First-Ever Bear Market, Similar to What Happened to BTC in 2015

Chris Burniske, a crypto investor and a partner at Placeholder recently argued that ETH was going through its first major bear market, similar to what happened to Bitcoin in 2015. He made the comments on August 20 via twitter. In the tweet, he noted that in retrospect, the 2014-2015 period offered the best risk/reward balance for BTC investors.

 

The investor also noted that to an objective person, the momentum of the network was clear despite the bear action at the time. However, those predisposed to hate based on some personal interests were unable to see this due to their biases and they missed the opportunity. He added that what happened to BTC back then is now happening to ETH.

Bottlenecks

The founder of Binance also dived into the issues around Ethereum. According to CZ, Ethereum was doing quite well. He opposed recent comments by Vitalik Buterin that scalability issues for ETH had not been solved. CZ said while he likes Buterin, speed, and scalability were not an issue on ETH at this time. He added that the problem had mostly been solved. Additionally, he wanted people to focus on finding real-world uses for the Ethereum blockchain. As real-world use grows, it could help to increase the value of the Ether and promote the development of efficient solutions.

In responses, Vitalik said the issue of scalability was far from solved. He noted that even on semi-centralized blockchains will only process transactions at the rate of hundreds per second. Vitalik gave the example of EOS, which he claimed was facing major issues of scalability and might soon run out of capacity.

Off-Chain Solutions Are Not Working

The co-founder of Ethereum also admitted that his faith in off-chain second layer solutions such as the Lightning Network was waning. Lightning Network is a solution for scalability that was built for BTC. It opens up a payment channel between two users, which helps to keep transactions off the main blockchain. As a result, the main network is only used to settle net results in the network. In his opinion, the second layer solutions were too difficult to build and they required too much reasoning about the incentives. As such, it had become difficult to generalize these solutions.

Price and Technicalities

While Ethereum recently underwent a bear run, most in the crypto twitter world believe that it could hit $1000 at some point in the future. This optimism has been deeply tested in the midst of crypto winter. Tom Lee, who is a senior analyst at Fundstrat made the wrong call that ETH would reach $1900 at the end of 2018. Buterin’s remarks indicate that with scalability still a huge issue and the pressure of reduced transaction space and high transaction costs, new partners were keeping away.

Meanwhile, Bitcoin has been sliding again after a short-lived rally. However, analysts are still optimistic. Many believe as it continues to slide below the $10,000 mark, it will eventually reach the ideal buy zone before it rebounds again.

 

This article was written by Eric Scriber for BitsAndTokens.com, all rights reserved.

 

 

Ledger Nano X - The secure hardware wallet

No Comments

Add your comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.