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?

wtf.png

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.

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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.

  1. 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.

  2. 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.

  3. 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 ether-price-prediction.jpeg


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  • @meyrep

    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.

  • @bigtakosensei

    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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  • @cloudspyder

    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.

  • @videosteemit

    It might... but it would be a repulsive crying shame if it did. !giphy teardrops

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  • @elbiasto

    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.

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  • @joeyarnoldvn

    Sad.

  • @jamesabigail

    Nice analysis!

  • @chekohler

    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

  • @exscudo

    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.

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    .... 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.

  • @torros

    Very convincing arguments. Nevertheless the same can be said for almost any cryptos.

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  • @blake.letras

    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! :)

  • @youtatomokuni

    Such a huge question and it was explained really well in here! Great job! @ethsensei

  • @coinoclast

    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

  • @hirotokyung

    このような素晴らしい記事!

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  • @spectrumecons

    Welcome to Steem. Pretty good post but I needed to downvote you for 2 reasons.

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  • @jmehta

    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.

  • @imran101

    i could not agree with you.....

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  • @ioanasolea

    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 :)