The world of cryptocurrency took a jolt as the Ethereum price stumbled, dropping about 25% from its mid-March zenith of roughly $4,100 to currently trading slightly above $3,000. This drop reflects the wide-ranging market trend, with Bitcoin’s price also taking a hit and plummeting about 22% over the same period. But unique factors in the Ethereum narrative might be responsible for its dramatic dip.
German economic policy may have played a role in Ethereum’s fall, as the country only trades Bitcoin (BTC) but not Ethereum (ETH). Adding to this, the infamous Japanese cryptocurrency exchange, Mt. Gox, holds no Ethereum. How would the scenario be if Ethereum had its own “Mt. Gox”?
Notably, Chinese crypto-journalist Colin Wu recently highlighted significant movements of Ethereum funds associated with the Golem project. This Ethereum-based initiative staged a significant Initial Coin Offering (ICO) in 2016.
According to Wu, Golem, which gathered a staggering 820,000 ETH during its 2016 ICO, shifted 36,000 ETH, approximately $115 million, to platforms like Binance, Coinbase, and Bitfinex over the last 37 days. Data analysis service Lookonchain affirmed the transactions, revealing that Golem sold 24,400 ($72 million) on those platforms in just three days and still holds 127,634 ETH (about $372 million).
Golem was a significant player in the crypto space with its Initial Coin Offering in 2016. With an ambitious goal of creating a decentralized supercomputer by tapping into users’ computing power, Golem allowed users to rent out their computing capacities. Through the ICO, Golem raised about 820,000 ETH (valued at $8 million at the time) in 29 minutes, becoming a symbol of the ICO bubble era.
Golem’s long-term influence and relevance, however, has eroded significantly, as reflected in the token’s price, which has sunk from $1.32 in January 2018 to $0.32 currently.
Criticisms from cryptocurrency experts have been loud and clear. Adam Cochran, a partner at Cinneamhain Ventures (CEHV), expressed his disgruntlement at Golem’s lack of progress despite having significant funding, while Jimmy Ragosa, an advisor at Sismo, irony-ridden remarks highlighted the disappointment in Golem’s use of the large amount of funds.
Another view came from an anonymous commentator with the handle @based16z, who reflected on Golem’s decision to dump such a large amount of Ethereum, suggesting that Golem might have knowledge of something the public does not.
While much about the impact of Golem’s significant ETH sales on Ethereum’s price drop remains speculative, it’s apparent that the continuous selling pressure must have contributed, at least to some extent, to the current slump of the Ethereum price. As of press time, Ethereum was trading at $3,049.
As traders and investors try to make sense of the current performance, Ethereum still manages to maintain a fragile hold above the $3,000 mark. With no shortage of market opinions and interpretations, the precise mix of factors contributing to Ethereum’s current predicament remains a riveting mystery.
