The world’s second most valuable cryptocurrency continued its slide in early trading in Europe on Friday, as participants fretted about the repeated delays to a major change that aims to make it more scalable.
At the time of writing, Ethereum had fallen 17.72% to trade at $1775 a far cry from the $4700 range seen last year
Vitalik Buterin, the chief architect of the Ethereum network, had told a conference in Shanghai last week that the network’s planned transition to a so-called ‘proof-of-stake’ system – already significantly delayed – will likely last until August. The switch is set to cut the Ethereum network’s energy intensity by over 99.9%, removing a key obstacle to it processing larger transaction volumes.
The news implies that Ethereum – like all other cryptocurrencies – a momentum-driven asset – faces an uncomfortable wait for one of the biggest value drivers in its investment case to materialize. Much speculative interest in Ethereum in the last year has been in anticipation of the so-called “Merge,” which its supporters say will give it a big competitive advantage vis-a-vis Bitcoin in future as the two assets fight for market share in the crypto universe.
Ethereum slumped to a 14-month low of $1,717.66 before paring its losses slightly to trade at $1,773.70 by 3:10 AM ET (0710 GMT).
Cryptocurrencies, in general, have been under pressure from the rising interest ratetrend in the U.S. and, most importantly, the collapse of the network underpinning algorithmic stablecoin TerraUSD.
Ethereum’s problems have also hurt sentiment toward other alternative coins in recent days. Cardano has fallen 12% over the last week, while Solana has fallen 19%. Bitcoin, by contrast, has lost a relatively modest 3.5%, profiting from its greater liquidity that has made it a safe haven of sorts in a generally negative market. Even Bitcoin, however, is now trading at its lowest December 2020.
