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Ethereum Price Falls Below $300 as Cryptocurrency Market Tumbles

The price of Ethereum has fallen below $300 as the cryptocurrency market enters a more intense bearish pullback. Except for Tether, all other top ten coins have experienced significant negative price movements within the last 24-hour trading period.

Ethereum Tumbles 17 Percent

Ethereum, the second-ranked cryptocurrency according to market capitalization sunk to its lowest 2018 valuation on Monday afternoon UTC. ETH has not traded below $300 since the start of November 2017. At press time, ETH has dipped more than 17 percent to take its 2018 decline to 60 percent.

The decline in the price of ETH is being attributed to the disillusionment of ICO investors. The sheer number of ICO exit scams and the amounts being siphoned by these pump and dump schemes has created negative sentiments in the ETH market.

Ethereum, the preferred platform for most ICO projects benefited from this fact reaching above $1,000 in February 2018. At the time, BTC was declining below $6,000. However, the tide seems to have turned as many of the ICO projects that generated interest in ETH, driving up its price have begun to cash out to cover expenses. Thus, the ETH is is starting to slide. Commenting on the issue, BloomWater Capital chief, Biswas Das said:

These startups are raising a lot of funds, but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year, but right now, the market is so fragile that it causes a lot of pressure.

The general bearishness perhaps exacerbates the ETH decline in the market occasioned by stricter regulations and the slow pace of institutional adoption. Experts believe that projects aren’t done cashing out and thus predict even more pain for ETH investors as prices sink even lower.

Bitcoin Dips More than 20 Percent in August as Altcoins Continue to Bleed

Bitcoin briefly slipped below the $6,000 mark in the early morning on Tuesday (August 14, 2018). The top-ranked cryptocurrency is now back above $6,000 at the time of writing this article. BTC has dropped more than 20 percent in August eroding most of the gains accrued in July. Bitcoin’s year-to-date decline now stands at 57 percent.

Positive sentiments leading up to the SEC’s decision on numerous ETFs drove prices up to $8,400 in late July. However, the Commission has either rejected or delayed approving the various filings brought before it. The consensus is that an SEC-approved Bitcoin ETF in 2018 is highly unlikely.

The altcoin market, in general, appears bleak as well with prices depreciating significantly. Cardano leads the decline in the top ten, falling more almost 20 percent within the last 24 hours. Outside the top ten, Ethereum Classic has been unable to maintain its upward price trajectory after a raft of platform adoptions. The 13th-ranked cryptocurrency is currently down by more than 19 percent in the last 24 hours.

How low do you expect the price of Ethereum to reach in this current decline? Keep the conversation going in the comment section below.

Image courtesy of Coinmarketcap.

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Consumers Have Lost Almost $100 Million To ICO Exit Scams

A common criticism that onlookers have for the cryptocurrency industry is that it is rife with scams and criminal wrongdoings. While this is often an unwarranted blanket classification of this nascent industry, research done by Diar, a weekly fintech-focused publication, claims that there are still some bad actors present in this industry

According to last week’s Diar report, ICO exit scams have raked in approximately $96.8 million in the past two years. While this is a staggering figure in and of itself, it was reported that approximately 70% of these funds were stolen within the past two weeks, with the culprits being four different projects run by two ‘firms’.

The first firm is Shenzhen Puyin Blockchain Group, a shady crypto-centric firm based in China’s Guangdong province, who reportedly ran three scam ICOs — ACChain, BioLifeChain, and PuyinCoin — which raised over $60 million in funds collectively.

As pointed out by eagle-eyed users on Reddit, the office in which the teams of the three aforementioned ICOs were supposed to be in remains empty, clearly indicating that something shady had occurred. Eventually, as news of this scam spread, the State Market Regulatory Administration (SMRA) of China caught wind of these projects and the company behind it.

The second firm was NVO, who raised nearly 3000 Bitcoin to ‘build’ a decentralized exchange and cryptocurrency wallet before disappearing altogether.

While the publication didn’t go into much detail about the other 10 scams listed, there was one that stood out, this being Block Broker. Ironically enough, Block Broker was founded in a bid to “completely eliminate ICO fraud by creating a 100% safe investment environment.”

It all seemed well and good, with ICO review sites like TrackICO, posting a multitude of raving reviews for the project. However, when it was revealed that the likeness of the project’s CEO was nothing but a stolen photo, it became evident that BlockBroker was a scam posing as a scam “eliminator.” Sadly, by the time the expose occurred, it was too late, with the figures behind the project running away with $3 million.

As the publication notes, the use of “fake profile pictures” is a common practice with exit scam projects, along with the plagiarism of promotional materials and whitepapers, which should be focused on showing a token or project’s worth instead of the malicious action of copy and pasting.

Although these projects — or scams more accurately — are clearly in the wrong, the aforementioned report notes how the incentives around an ICO offering are inherently flawed, writing:

“Unsurprisingly, the blatant exit scams continue to plague the largely unregulated ICO sector where the founders have no contractual obligation to deliver a product. After raising millions of dollars with no string attached, the founders’ incentives to actually build a valuable company are very limited.”

While this is a powerful statement by itself, as it clearly highlights the issue with the ICO crowdfunding structure, to add insult to injury, the report drew attention to yet another issue in the following statement:

“Even if the founders were to build a valuable venture, it’s unclear at best whether the price of the utility token would reflect the success of the company.”

This statement brings a much more fundamental issue to light, where cryptocurrency projects can be often overvalued, as investors seek to make

Despite the theory that scams are likely a minority in the ICO pool, as Ethereum World News has reported, many projects which are operated in good faith fail to meet promises touted in their whitepapers, including claims of decentralization.

While this issue may be starting to subside, with the development of blockchain technology pushing forward at a relentless pace, the aforementioned problems with the ICO structure still prove to be a problem in today’s cryptosphere.

Photo by Fancycrave on Unsplash

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