Could the drop be over?
The sudden explosion of Initial Coin Offerings (ICOs) last year made many crypto market analysts to attribute the decline in the price of ETH to the sell-off of Ethereum holdings by projects that have raised millions through ICOs.
According to Diar’s research, most Ethereum-based projects are holding close to $720 million worth of ETH in their Ethereum treasury. Filecoin, Kyber, Iconomy, Gnosis, Tezos, Aragon, Status, Golem and DigixDAO are all sitting on top of more than $10 million, with Golem and DigixDAO both holding more than $70 million.
On October 1, however, according to new research from BitMEX, ICO projects have not lost a coin despite the huge price drops in cryptocurrency prices since early this year. The study reveals that the fall in the value of ETH this year did not impact blockchain projects. Therefore, the recent drop in the value of Ethereum cannot be solely associated with the speculated sell-off of ETH projects, the BitMEX team concluded.
Was the narrative wrong?
This year alone, ETH saw its value dipping by 74% (from $780 in April to $200 in September. At the same time, the price of Ripple (XRP) plummeted by over 75% (from $1 to $0.25). Last month, XRP initiated an extraordinary corrective rally as its value skyrocketed by almost 100%.
The price of ETH also rallied, but the increase was not as big as that of XRP. Most people attributed Ripple’s price surge to positive news about its products, such as xRapid.
It is possible that the decline of the price of ETH was triggered by a normal market movement and not the sell-off of blockchain projects.