The Ethereum project has been plunging further than Bitcoin, and investors are disappointed in what has been delivered in terms of both technology and price. Despite all the hype about what is undoubtedly a revolutionary ecosystem, mainstream adoption is not yet here, and may not be for quite some time.
Investors losing patience in Ethereum project
In 2017, all talk was on Ethereum, while Bitcoin was regarded as a one trick pony that could serve as a new form of currency. The Ethereum project was going to change the world, introduce a new internet, and build a thriving industry of dApp development which businesses would flock to.
Not of the above has happened. Along with a failure of mainstream dApp adoption, Ethereum has underperformed price wise. Eth is down more than 76% this year, compared to its phenomenal growth last year. While Ethereum has first-mover advantage, there are multiple cryptocurrencies which have risen to take its place, such as Neo, Qtum, Tron, Cardano, and Eos (the “Ethereum Killer”).
Ethereum has significant scaling problems, which need to be resolved sooner rather than later. The popular Etheremon game was forced to migrate to Zilliqa due to the failure of Ethereum to accommodate the users in the network. This is only one game. In order to create a new decentralized internet using dApps, it has a long way to go in its scaling solutions. Most 2017 ICO projects (over half of which have collapsed) kept their reserves in ETH, which has been decimated. According to Eiland Glover, CEO of the Kowala stablecoin-
“Ethereum is facing a massive crisis in investor confidence over its inability to rapidly scale in the face of competition.”
A quick reality check
The primary cause of investor worry is mismanaged expectations. With the rise in ICOs in 2017 and the astounding profits, people expected ETH to continually rise in price, as a superior technology. We are past that phase. It is now time to invest in DLT technology and expect good but not spectacular gains.
What is far more worrying than a failure to deliver price increases is Ethereum’s scalability problems, when taking into account the fact that there are many other viable networks which could eat into its market share. This is the view taken by Satis Group, who asserted that other dApp coins would advance at its expense, though ETH is still undervalued. Bitcoin does not have this problem to the same extent Ethereum does, and its Lightning Network is already operational, if not exactly user-friendly.
In all likelihood, the Ethereum project will continue to be a dominant force and is a remarkable buy at present prices. Investors simply expect too much and are unwilling to exert patience, which is now necessary for a field that is experiencing organic growth along with widespread price manipulation.
However, its position is possibly a little more precarious than Bitcoin, due to its competition and lack of mainstream adoption. While Ethereum boasts technology far more sophisticated than Bitcoin’s comparatively simplistic model, Bitcoin is the one that is currently delivering.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.