Why Ethereum Will Never Reach Another ATH
On Jan 13, 2018 Ethereum reached it's all time high of $1,448.18, and it will never, ever, be that valuable again. You're probably thinking, what the actual f*ck?
Well it's true, and you need to accept it, or you are never going to make it.
I am Sensei Ether, and I'm going to tell you why.
If you go to CoinGecko there's an interface that shows the ATH of popular cryptocurrencies and how much they have fallen since. The ATH of Bitcoin was $19,665.39 on Dec 16, 2017. In the volatile year that followed, Bitcoin lost close to 90% of its value. It's recovered some, and sits at 58% of it's value from ATH. Ethereum as you can see below, hasn't fared nearly as well.
At press time Ethereum is $211.15, only 14% of its value since ATH. In this article we will cover the reasons why this happened and make a case for why it will never again reach ATH. The first reason is simple and obvious: the ICO Craze of 2017.
In 2017, it became easy for anyone with a basic understanding of computers to create their own ERC-20 token on the Ethereum block-chain. If you invested in cryptocurrency during this time you probably remember being able to recklessly throw money at the newest ERC-20 fad and make a quick and easy 200% on your initial investment. Many of these ERC-20 tokens were created by people incapable of maintaining the insane evaluations given to them by speculators, who were high on dumb money. Eventually, anyone who didn't sell the top would regret ever hearing the names of the ERC-20 investments they made, as most alts slowly went to zero.
The ICO Craze of 2017 is sometimes referred to as Alt Season, and often by people who have no real clue what they are talking about. The only Alt Season that has ever existed is dumb money using Bitcoin profits to recklessly gamble on ICO/IEOs, and that's the only Alt Season that will ever exist. The reason that Ethereum became so valuable during this time is because you needed Ethereum to participate in "Alt Season", it was the perfect storm for Ethereum and for a number of reasons, it will never happen again.
Crypto investors are smarter than they were in 2017. The people who made money in 2017 already sold the top, and the ones who didn't learned an expensive lesson. Anyone who watched their portfolio slowly circle the drain because of some bad Alt investments are going to be less willing to invest in some random ERC-20 fad.
Ethereum no longer has a monopoly on ICOs. You have Tron, EOS, Binance Chain etc. All else being equal, you could divide the Ethereum ATH by the number of competitors dividing Ether's previous ICO monopoly, and you'd have a sensible future price evaluation.
Regulations. Every day, crypto becomes less and less of a wild wild west than it was the day before. You see legacy software companies like Facebook trying to enter the market, and you see more and more regulations. Let's be honest, Ethereum would have never reached $1400 if everyone trying to purchase it was forced to do KYC and AML.
So what will happen to Ether? In next week's follow up we will give our long term price prediction and how we came to that conclusion.
-Ether Sensei
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Nice article. However, never is a bold claim. The main argument here is that ether reached an ATH due to the stupidity and recklessness of early adopters, lack of competition to the Ethereum blockchain as smart contract facilitator, and regulatory bodies. Even now the amount of people investing in crypto is increasing (that goes without saying that a large percentage, are, at least reckless). Furthermore, I don’t believe TRON, Binance Chain, EOS or NEO have the same number of (professional) developers --- although that is changing. I honestly think we’ll see a new ATH, however, probably we are another 10 years along.
With so many competitors for Ether, give me one good reason why it will see another ATH.
If even half of the ETH tokens deliver on their business cases AND the ethereum blockchain can keep pace with their technological roadmap then this will drive the price of ether up again. Of course my second point must hold since if ethereum cannot scale then token projects with migrate. I do think that the competitors to ethereum will actually drive all projects up. Investors will see the market mature and then we will have a new ATH for all the worthy coins/tokens.
I wholeheartedly agree. But as someone who has created multiple ERC20 tokens, that is a pipe dream. The absolute best case scenario is 10% of all ERC20s delivering on their business cases, and even if that were to happen (it's closer to 1%) we must also consider that ERC20 and Ether in general is an extremely speculative investment, meaning that you buy the hype and sell the news, because the news is always weaker than the hype.
It's over for Ether.
It might hit $500 again but it's never going to $1400, the same as the other 99% of coins that have pumped and dumped.
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This is cool, thanks.
It depends on your point of entry. If you invested in ETH in 2016, even at around $200 a token, your gain would have been fantastic. So timing is everything.
Most definitely. I wish I would have bought 5000 Ether when they were $1 each.
Alts are under appreciated. Eth is starting to grow on me a little bit. I haven’t done too many transactions yet but I’m noticing more tools being built on eth that I can actually use. I think they’re stepping things up a bit, it may take a long time but I think eth will see some good growth beyond where it is now.
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Maybe, but I'm not buying the hopium. There's no reason Ether should see another ATH.
Every single time bitcoin has bubbled, litecoin etc etc over the last 10 years it felt like the ingredients that made it happen will never happen again. You will wonder where the hell all the buyers are coming from soon and why they are coming now and not before. When people with money smell momentum and confirmation there is no limit as to how much money starts to come down on to the tables of the casino. Trust me.
Maybe, but I don't see any reason why Ether should hit another ATH.
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Wow that's a lot... How about steem wouldn't it be nice if it at least touch a new ATH even 1 cent high only.
This post has received a 59.72 % upvote from @boomerang.
It might... but it would be a repulsive crying shame if it did. !giphy teardrops
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The problem with ETH is that the development is way to slow in my opinion. There didn't happen a lot since the cat game that caused a lot of trouble.
A whole DeFi ecosystem has been developed since then (Decentralized Finance, starting with DAI). Not as fun as CryptoKitties, but more useful.
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Sad.
Nice analysis!
I think ETH still has a long way to go and while the ICO craze artificially pumped the price there is still value in the chain and with companies like consensus using ETH to build products for corporates the chain will get more sustainable use and value over time
Honestly, ETH has a much higher chance to overthrow its previeus ATH than bitcoin or any other HODL crypto. It will be determined by adoption and use cases. Bitcoin was a revolution and an experiment – ETH is a crypto that is looking into the future.
.... a bit overly bid-botted. In the future, please leave some of the reward pool for the others. We are having a shared economy here.
thats insane!!!
what exactly is insane here @lilgabesta?
"I remember back when I submitted my first #introduceyourself post and went a little crazy with the bid bots"...
Said no one ever... :-)
Oh I see, it's an #introduceyourself.
Hopefully @ethsensei wont continue at this pace.
But it kinda shows how people view this platform. Unfortunately.
I don't understand what the problem is.
I don't understand how steemit works. I'm an eth dev and investor. I used $70 to promote the post with bots. Is that not what they are for?
As mentioned in the whitepaper:
Every day the reward pool is distributed among all post, according to the upvotes.
If you take a huge chunk, there is less for the others.
You are also taking a part of the reward pool that is in no proportion to the content you provide.
On steem, as there is no police, everyone has to decide for themselves, what's ok and what not.
In my humble opinion, the use of bidbots beyond a payout of 50 is not ok; also people notice this and take you less seriously.
The fairest way is to constantly provide good content, maybe invest 5-10 steem here and there for bidbots, be consistent and patient.
Greed's the biggest killer of all.
btw.: As you said, you pay for it. The profit goes to bidbots.
people also might frown upon self-upvoting comments.
and: A downvote is a very bad reply to serious critizism. I mean, I spend time here explaining steem to you.
Shows how new you are. I'd tread carefully.
Why don't you spend more on bid bots or make better content, isn't that how a free market works? Are you a socialist/communist?
Are you entitled?
Do you notice I am not downvoting all of your comments I disagree with? This is because I understand the mechanics of STEEM. Downvotes are not personal attacks, the fact you are viewing them that way and retaliating says a lot. The fact you did used a service that most people don't on their very first post, doesn't absolve you of the reward mechanics of STEEM. The free market as you stated, means that people can return rewards to the pool if they feel a post is over-rewarded. Over $100 for a few paragraphs and a photo is disproportionately higher rewards than others get for similar content.
Perhaps if you are new you should take the time to actually learn the mechanics of it, or at the very least, be more receptive to people attempting to explain them to you.
Very well said...
as usually, the captain is right. Listen to him, instead of downvoing him, @ethsensei.
I checked both of your blogs and didn't see any content that was as good as what I posted. I think you are trolls.
Bid bots are a contract between you and the bot operator, they are not an inherent feature of this blockchain. As @captainklaus said, if people feel you are being disproportionately rewarded, they can return some of those rewards to the reward pool. It's your choice if you want to take that personally, but it's a bad idea, especially if those people are attempting to explain the mechanics to you.
I find it strange that you are so new to STEEM and were able to bid bot your first post, but don't understand the wider implications.
You guys seem crazy to me. Here's my take:
There is no STEEM police, it's self policing. Watch.
Flagged for bit bot abuse and retaliatory flagging @steemflagrewards
And that's how you get muted. Cheers.
STEEM police!!! that guy's fantastic!
Thanks for participating here, @joshman.
and to wrap it up some !popcorn.
Flagged for bit bot abuse and retaliatory flagging @steemflagrewards
The downvoters are the Steem police.
Thanks bid bot police, no one really cares how much he spent on bid bots. In fact, if he is willing to pay extra sbd to promote his post I'm taking him more seriously. Your comment is a distraction for readers and should be replaced by an automated bot that watch over bid bots
Great idea!
You're exactly right. Either one of them could have done the exact same thing I did. It seems like they have a dislike for the bots, no matter how they are used, which I can understand. But they really shouldn't waste time critiquing my use of them, they both seem to be grown men, you would think they had more important things to do.
Thanks for saying what everyone is thinking.
I think it has been demonstrated that people do care, particularly people with stake in the platform who actually care about protecting the reward pool from abuse. You are entitled to your opinion, but are equally as ignorant to the OP.
And the whole system is designed to be self-policing. Some of us actually bother to participate in that effort. I shouldn't have to explain that either.
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Thank you so much for your interest!
Very convincing arguments. Nevertheless the same can be said for almost any cryptos.
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I just vote you man i think you can do thesame for me too.
It looks so Great!! I have no idea about the bot
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Thanks for sharing the article @ethsensei, but, respectfully, you're dead wrong. You're missing the big picture of cryptocurrencies and you are likely thinking too much like a trader.
The swing traders are going to feel a lot of pain soon, because public blockchains are not like the stock market, they just have not figured that out yet.
Bitcoin and Ethereum are grand-fathered into the space like Youtube and Facebook. The reason this is true is because these blockchains are more like social network platforms than they are like companies. The network effect is key, and they are vastly ahead of everything else.
Ethereum is second only to Bitcoin in market cap, and second to nothing in development. No blockchain has anywhere near as many projects built or being built on them as Ethereum has.
Every other blockchain is merely a promise, no different than those lame ICOs that you're talking about as the "ICO craze" of 2017. After the ICO craze came the next thing: the blockchain craze. We have many wannabes out there trying to become the Ethereum killer, but they are not succeeding.
EOS, TRON, Energi, these blockchains are a joke. DPoS is cool, but its cool for things that are not a base trust layer but a layer 2 solution. They are not true decentralized protocols, they are republics. Republics are also good, but they are not good for a base trust layer.
Loom Network is a perfect example of how DPoS can be used to scale things. Ethereum is like a bank, while DPoS networks like Loom allow Ethereum assets to scale in their utility when one wants to use their digital assets, when you want security you put it back on the most secure network , Ethereum. Ethereum is a nice cozy bank, and you can always draw back that $50,000 Wookie Fir Coat from the game Oh God Another Star War Online to the safe and cozy bank when needed.
Now, all that said, I am not saying there are not legit blockchains with actual value in the space. Cosmos can do things that Ethereum cannot do, which means it is not a mere copycat or rendition of the same mission but actually provides an entirely different value.
Cosmos, however, is not going to be a base layer of trust. This is because Cosmos does not actually offer security to the blockchains on it, they are sovereign blockchains. That sucks... We can make blockchains any time we want! A little forkety fork fork and away we go!
Well, okay, Cosmos makes custom designed blockchains a lot smoother, easier and sleeker. That's cool. But at the end of the day, you have to get your own security. See, that makes Cosmos nothing more than a fancy tool for building blockchains, but that's not really cutting into what Ethereum offers.
Ethereum offers automatic security. Now, Polkadot is kind of aiming to do that as well, so BLEEP those guys. But Cosmos is not really able to offer people what Ethereum offers. We'll talk about this topic more below...
Ethereum's Niche
You have seemed to not realize that Ethereum did find its niche. And no, it is not as the ICO craze machine... It is as the main DeFi base layer of trust. Many of these applications have no need for a token to begin with such as Compound and 8protocol.
DeFi applications do not mind $0.03 transaction fees, but for things such as social apps there are effective methods of getting around charging people fees anyway such as the RelayHub/Gas Station. And there are creative decentralized ways of distributing tokens such as rewarding ETH donators that are donating to the gas paying address with native tokens of the dapp.
The majority of the companies building things are going with Ethereum. Big companies like Ernst & Young are building on Ethereum and telling people that "businesses will be building on Ethereum."
Ethereum already has the network effect. Solidity has become one of the hottest languages to learn now, with educators popping up all over the place. This only becomes more and more true as blochchain projects use Ethereum's EVM.
No Such Thing As A ShitERC20
There are shitcoins, but I tell you the truth, there are no shitERC20s... I said it, because it is the truth. Spinning up a blockchain is not the hard part, its making that blockchain worth enough for people to secure it that is key to whether or not its native token holds any value.
Most blockchains in existence can be 51% attacked by buying hashpower, and often times the cost is less than your last paycheck. Yep, most blockchains are completely vulnerable to malicious attack, but are likely not attacked because that blockchain is not worth attacking.
ERC20s come with security in the box. You know that the security of Ethereum itself is backing your asset, and that gives people a really good feeling. That's why people are calling it the future base layer of trust. Sure, Bitcoin is more secure than Ethereum, but it only secures bitcoins, nothing else.
Ethereum's New Motto:
Some things in life are secured by Bitcoin (really just bitcoins), for everything else, there's Ethereum...
Ethereum IS The Future
The ICO craze led to many projects trying to create their own token because that was how you could get your slice of the big money. But that does not mean that ICOs are the only way to use Ethereum. On the contrary, tokenized securities, tokenized assets and utility tokens are just a few use cases for smart contract development.
Ethereum is ideal for hosting the 2.0 version of the derivatives market, insurance policies, business-to-business arrangements, real estate deed transfers and many other applications. Boring stuff, but its big business and ether can become a major resource to a wide variety of industries.
So, Will Ether Ever Return To ATH?
In simple words, you can bet your ass... But let's get more detailed!
The Ethereum we all know and love is destined to be just a shard of the greater vision known as Ethereum 2.0 that is planned to launch Phase 0 in Q1 of 2020. In a post Serenity world the Casperly, eco-friendly and sharded future will provide a 20,000+ transaction per second performance. That's right, you'll be able to buy coffee...
At the current rate of transaction fees that means the Ethereum fee market would be 18,921,600,000 per year. That is nearly the current market cap of Ethereum right now, which means that the real price of ethers would need to go far above that rate to meet demand.
The more transactions Ethereum can take on the more projects will build on Ethereum, and they will need to raise funds in ether to cover business costs. Bitcoin is being held only as a speculative hedge against the faulty economic system in place, but ethers will continue to be a resource that dapp projects will need to stash away for operational consumption. That aspect combined with the new PoS system will result in some serious pumpamentals.
In closing, while there are lots of projects gunning for Ethereum and we have heard, "Could this be the Ethereum killer?" many many times, nothing has indeed killed Ethereum. Emperor Vitalik is yet to be dethroned and development is yet to have waned.
Polkadot is a threat, one that I am watching carefully, but outside of that single blockchain, yeah, no... So, once more for emphasis, BLEEP Polkadot.
Welcome to Steem! :)
You missed a key aspect. Ethereum's of 3 cents or so per transaction are not here to stay. There are plenty of layer-two scalability solutions on the rise and they pick Ethereum because it encompasses true decentralization. With the delivery of layer-two scalability solutions, DApps can take advantage of Ethereum's security and decentralized state, while not having to worry about throughput bottlenecks.
Check our 2key Network as it's possibly the most advanced layer-two solution and it properly takes advantage of the various Protocols, like Bancor, that already operate on Ethereum. Not to mention, their technology enables instant creation of nodes and acquisition of ERC-20 wallets with the mere click of something they've termed as Smart Links.
Such a huge question and it was explained really well in here! Great job! @ethsensei
Interesting post, thanks! I've been hearing a lot of chatter about "defi" (decentralized finance) being built on Ethereum, which could propel it back to the top. Since you didn't mention defi I was wondering whether you were aware of these projects, or just didn't think they were worth mentioning. Cheers
このような素晴らしい記事！
Congratulations @ethsensei!
Your post was mentioned in the Steem Hit Parade in the following categories:
Thank you :)
Welcome to steemit @ethsensei.
Welcome the new steemians. Have a great day!
Welcome to Steem. Pretty good post but I needed to downvote you for 2 reasons.
I think you went a bit heavy on the vote buying for your first post. You could be as high as third on both the 'introduceyourself' and 'ethereum' tags with a payout as low as 10 STU (the dollar value you see on your post). You could also use the 'steemleo' tag for your content to appear on this tribe. If you pay for promotion on steemleo, you can get on the top of the trending page for less than a dollar. I think 30 Leo will get you at the top or near the top of trending for most of the life of the post. It is very easy to do. There is a 'promote' button at the bottom of SteemLeo post. The amount you pay is burned and is therefore good for the community. if you want top learn more about tribes, I would recommend going to Steempeak.
The second reason I downvoted is because you downvoted other users who are trying to offer you good advice. I do not like this attitude. There is a lot to learn on Steem. I have been here over 2 years and I am still learning. I wish you all the best.
Thanks for pointing this out & skipping in the effort!
No problem. I hope the OP finds it useful.
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The price will be determined by what people are willing to pay for it, that being said, I believe the crypto ecosystem will head towards a multi trillion dollar market cap in the coming years with BTC and ETH leading the way.
i could not agree with you.....
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Thank you for the useful insight. I invested in ETH earlier this year and I was wondering where the tendencies are heading. Still keeping my optimism that it will worth it :)