Like Bitcoin, the value of Ethereum has plummeted significantly over the past few days. The main reason for this drastic drop is the mysterious movement 380,000 ETH from a Genesis block to new wallet addresses.
The Ethereum Genesis block was launched four years ago, the same time as the blockchain protocol. Throughout this period, the network has yet to address the challenge of scalability. Nonetheless, the Ethereum blockchain has gained popularity for its support for the formulation of tokens through which startups can raise capital.
The 380,000 ETH in question was moved in two batches of 228,000 ETH and 152,000 ETH respectively. The amount has since been moved from these two accounts. The recipient account currently has 455,000 ETH which is equivalent to $58 million at the prevailing exchange rates.
As expected, this suspicious activity adversely affected the reputation of Ethereum in the crypto community. Though the general crypto markets plunged in the last week, this incident also contributed to a drop of Ethereum’s value. Currently, ETH is valued at $113, a figure that is way below its previous range of around $210.
The price drop sparked massive selling of ETH by its holders. In fact, the increased selling activity caused ETH transactions to exceed $3 billion, a record high.
For now, the future of Ethereum looks bleak. Indeed, some experts have predicted that the popular cryptocurrency may soon fall below the $100 mark. This is because a majority of its tokens are considered as unregistered securities by oversight authorities such as the SEC. Moreover, stringent rules have been imposed against ICOs, the primary use case of the Ethereum protocol.
Lastly, the plunging of Ethereum is a blow to its proponents who had predicted that the cryptocurrency would hit $5,000 in valuation in the near future.