BUYER BEWARE
The recent rise in Ethereum is more than just the typical pump/hype cycle. There are literally hundreds of ICO's that use ETH for their fundraising. And raise funds they've done indeed.
Billions of dollars of Ethereum have been traded for new tokens from ICO. So where does that Ethereum go?
These startups that started via ICO now hold hoards of ETH.
Can they pay their employees in ETH? Can they pay the power bill using ETH? Pay legal fees in ETH? Lunch even..?
The fact is that billions of dollars of Ethereum will need to be liquidated for fiat for these startups to be successful at all. Depending on the startup - it will be their choice to slowly liquidate as they need the fiat, or to dump larger holdings of ETH. To me - it seems like it would make sense to liquidate larger holdings to secure a hoard of fiat at these insanely high prices. Even Vitalik dumped 25% of his ETH in one sitting (around $8 each.)
Those heavily invested in Ethereum will say this is FUD. But this is a real concern, and it's why you won't catch me personally diving into Ethereum right now.
The fact is billions of dollars needs to exit Ethereum at some point. Only time will tell how soon and how much.
What are your thoughts?
Yes you may be right. And yes , you may be equally not.
Good point and most likely true.
The only question is how far will it rise til it drops?
$500?
$1,000?
Yes, good point. They will eventually have to liquidate a majority of the ETH for operating costs. LTC is the real sleeper. I wrote an article that went viral about China supporting LTC for their silk road project.
Totally agree on LTC. Checkout my post: "The Case for Litecoin"
https://steemit.com/crypto/@coinlord/the-case-for-litecoin
Yes, makes sense! Didn't think about this fact, thanks for sharing!
Good reflection on this issue. I'm looking forward to eos, but alas am not an ethereum fan. Strange that the ico's won't even think of taking other cryptos to diversify the investment.
Hard to say. New eth ico's will keep up the demand and the amount of crypto adoption keeps going up. But maybe one day a bunch of ico's will start dumping eth.
This is so true. I am betting on Bitshares. Eth has been all hype lately. To many promises.
@coinlord, your post sounds convincing but what if this is not the case?You said it with so much surety.