What’s Affecting the Ethereum Price These Days?

The Ethereum market has not been in the best of its spirits, owing to the various threats imposed on the Ethereum Bitcoin, following the fall in Ethereum’s market price. After it’s initial coin offering (ICO), Ethereum becume the second largest cryptocurrency in the market after bitcoin.

Also read : Ripple (XRP) Or Cardano (ADA) To Take Over Ethereum

ln its early days, Ethereum price explodds from under $10 to over $1,385 in early January. Just three months into 2018 however, the coin is struggling to hold the $400 mark. The 3 major reasons for Ethereum price is getting highly affected in the market are:

Mining profitability

The price of Ethereum depends a lot on the mining profitability. At the current price level, the profit levels obtained by mining Ethereum with a mid-to-top end graphics card correlate to approximately $80 per month (which would be a roughly 700 percent return on the cost of electricity for mining).

The miners are given a strong incentive to sell at higher price levels, particularly when the price level of Ethereum is between $300 and $400. The profitability is considerably higher this time.

Now more and more people are joining on the mining bandwagon as, individuals are now witnessing talks about NVIDIA putting forward ideas of GPUs specifically designed for the mining of crypto, meaning everybody is seemingly picking up mid-range GPUs in order to mine ETH.

Now, mining becomes less exclusive. With more people entering as miners, the current profitability of mining is significantly lowered, which means miners are less likely to sell their coins immediately probably postponing the sale until the price rises again.

Currently, the hash rate is around 2-3 times what it was in the middle of May last year, whereas the price level was around $120, and about 10 times what it was in January 2017 where the price was around $10. Thus, the “true” price of ETH would seemingly lie somewhere between $100 and $300, which is what is currently occurring in the markets we’re seeing currently in the markets.

The hash rate is increasing at a rate of 1000 GH/s per day, which is unlikely to accelerate in significant amounts in the short-term when more people can get their hands on graphics cards. At a current hash rate of ~60000 Gh/s this represents an approximate increase in mining difficulty seems to happen at a level of about 1-2 percent per day.

Regulation

Regulation by certain governments implemented in order to put a stop to Cryptocurrency exchange and trading can not be ignored. The aggregate effect of regulators has led to a decline in investment and those that did would have pulled out as soon as they could.

Read : Crypto Self Regulation Likely to Be Considered in South Africa

China has caused the drop of markets in previous years. For example, when the People’s Bank of China banned payment companies from working with the bitcoin exchanges in 2013, the market saw an immediate dip in fortunes.

Read :  China To Follow Global Cryptocurrency Regulations, Central Bank Report Suggests

The Exchanges

Right now numerous exchanges have stopped taking on new users. Bitfinex, for example temporarily cut down on the account registrations in December, in order to preserve the trading, support, and verification experiences of their existing, long-term user base.

Now new accounts have been opened which are more like temporary ones.

While most people are able to understand the ecosystem is still relatively new and, as such, can be exposed to problems, when market infrastructures seem to collapse, many people get worried.

The future now lies in whether these measures are taken care of, in order to retract the Ethereum’s downfall by bringing to top again with no threats from other cryptocurrencies.

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