Over the past few months, investors of ETH, the native cryptocurrency of the ever so popular Ethereum project, have had to fight off bears at every turn, as the asset has been battered by negative news and wavering sentiment on a daily basis. Although significant progress is being made for the project, ETH has recently plunged to establish a new year-to-date low under $200.
ICOs Have Spent $30M Of ETH This Week, Still $600M To Be Spent
As with any trending topic, the demise of ETH has been a topic of thorough discussion with cryptocurrency analysts, investors, and leaders alike, even in the furthest edges of the crypto industry. Everyone and their dog had something to say about Ethereum’s violent decline, with many taking to social media platforms to express their two cents on the matter. While there was a large presence of contrasting, emotion-based opinions, there were a few gems that brought logic and reason to the decline in the price of Ether.
One of those notable gems was an insightful tidbit of data from cryptocurrency researcher Kevin Rooke, whose work NewsBTC covered just recently. On Monday, Rooke continued to show his analysis prowess via a tweet, alluding to the relationship between Ethereum’s price and ICOs, with this relationship being touted as a primary reason why ETH has tanked as of late.
ICOs have spent over $30 million worth of ETH this week (153,500 ETH).
This is more than any week since March 2018.
The scary part? These ICOs still have over $600,000,000 worth of treasury ETH in their accounts (3,000,000+ ETH).
Will they sell? Will they hold? pic.twitter.com/DlGGziEBAZ
— Kevin Rooke (@kerooke) September 11, 2018
As per data from Santiment, a leading crypto analytics provider, compiled by the researcher, ICOs have spent over $30 million worth of raised Ethereum in the past week, or 153,500 ETH to be exact. Although “spent” has multiple meanings in the context of blockchain-backed assets, it can be assumed that a majority of the 153,500 ETH were sold on spot market exchanges so that projects could secure fiat for their war chests.
While the sale of 153,500 ETH was likely not the sole reason why the market fell by 20% in the past seven days, it would be logical to assume that the so-called “ICO sell-off” took somewhat of a part in this bout of capitulation. However, as Rooke added, there’s still a “scary part,” as ICOs still have over $600 million worth of Ether (Three million ETH) in their treasuries, leading some to ask if these firms will sell or hold their crypto assets.
This claim mirrors a similar comment made by Alex Kruger, a well-known cryptocurrency commentator, a few weeks back. In a tweet, dated August 23, Kruger wrote:
@santimentfeed‘s database, ICOs for which their Ethereum wallets are known have a visible balance of ETH 3.3 million, or $900 million at current prices. ETH 135K were transferred out / spent in the last 30 days (about 4%).
However, some claim that there are other catalysts behind Ethereum’s dismal performance over the past few weeks. Nouriel Roubini, a professor at New York’s Stern School of Business and a well-known economist, recently issued a tweet to claim that it is “no wonder [that] Ethereum is collapsing.”
No wonder Ethereum is collapsing. 75% of DApps are crypto-kitties, scammy Ponzi pyramid schemes & Casino games. The other 25% are DEX that no one uses as 99% of transactions are on centralized exchanges. & 99% of crypto-currencies have already lost 99% of their value. Meltdown!
— Nouriel Roubini (@Nouriel) September 9, 2018
Roubini explained that a majority of the DApps on the platform are “CryptoKitties, scammy Ponzi pyramid schemes & casino games” and the rest of the applications are DEXs, which “[nobody] uses as 99% of transactions are on centralized exchanges.” What the economist seems to be assuming is that these DApps are inherently bad, but arguably, collectible apps, games, and decentralized casinos could be seen as a way to bolster this industry, rather than cast it in a bad light.
Regardless, it is apparent that the Ethereum project has become quite the topic of criticism and controversy within the cryptosphere, and for now, this sentiment is likely to continue.
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