Everything that shall rise to a new, higher level should be prepared to fall down. How far will Ethereum fall if a meltdown were to occur on this digital currency? By how much shall Ethereum depreciate when the down trend or bear market trend hits it hard? These are questions that spectators and other cryptocurrency users are asking themselves. They are correct to speculate about the future downfall and then be prepared to make wise decisions. This will be essential before the inevitable bear trend catches up with their investments in this digital format of currency that is decentralized.
Recently, as Ethereum has been gaining momentum and then growing rapidly, it has also been witnessed as it fell abruptly. There were factors that contributed to its strength or weaknesses over the stipulated timeline. These factors include loss of confidence, criminal practices, global economic collapse, hacking attempts, bans by governments and glitches in the Ethereum. There are other factors that affected this digital coin resulting to long-term and short-term changes. The changes had a direct impact on their value, hence driving Ethereum to a sharp edge decrease that left many peer to peer users suffering losses.
To brace yourself ready for the next meltdown, you will need these factors to be at your fingertips and be ready for other future generation factors that may result in Ethereum falling. Being prepared for a circumstance is better than staying in the dark to wait for the misery to befall you and your assets in cryptocurrency. Ethereum is a decentralized fiat currency, meaning it is not regulated by any government or central bank. Being a fiat currency means it is backed only by the confidence of the users to exchange assets using the coin in their transaction. These are not old central bank printed notes or coins that were legal tenders backed by gold, silver and diamond reserves.
With such an understanding about the Ethereum coin we can evaluate each factor that may bring its meltdown, fall and demise. The confidence of the users of these digital coins has resulted in its impeccable growth in value. Due to more peer to peer transfers, exchange and conversion of this coin it has gathered massive gains in its prices. This may be a great contributing factor to Ethereum’s downfall in any timeline where the confidence of the users shall evaporate. Loss of confidence in the coin may result in a fifty percent drop of Ethereum price in just a span of one week and further decrease as days ago by.
In 2018, the cryptocurrency market was bombarded with a sharp drop in the value of all digital format currencies when users were no longer confident with it. This contributed to its first witness meltdown that was catastrophic to owners of this type of cryptocurrency. Criminal practices can be another reason that may catalyze the fall of Ethereum in this cybercrime era. This is due to its untraceable characteristics that criminals may explore to collect ransom, transact business and creatively launder money. It is not regulated by any government agencies hence it gives freedom to transact commerce without the limitations or worry of monetary policies.
Cyber criminals have exploited that fact, therefore perpetrating crimes against innocent victims and then demanded to be paid in Ethereum. If such a vice continues then a red flag may be raised which will result in a direct drop in impact on Ethereum. The laundering of money using this asset as a form of cleaning up dirty money can be another reason that shall impact it negatively. If red flags are raised against Ethereum, then its demise shall be near. Global economic collapse might be an interesting factor that may catalyze the fall of Ethereum at a rapid rate.
The year 2020 has seen the whole world implicated by a disease crisis that stopped all businesses. This had a negative impact on Ethereum prices for it experienced a rapid rate of decrease in its value. That could be an indicator that even in the future the Ethereum coin may fall far from its highest levels to lower horizons. Between January and April in the year 2020, Ethereum prices fluctuated between $220 to $89 in a rapid rate due to an unusual global economic lockdown. This has shown that Ethereum depends on active participation when transactions are occasionally transacted.
Bans by governments and other monetary agencies may be a reason for the fall of Ethereum price and value. This is a great element that would be a crushing wrecking ball that may hit Ethereum soon in the near future. Monetary agencies can keep up by setting rules that may end up regulating the activities done when owners do transfers of the coins. This will limit the number of those that use Ethereum, which will be a contributing element to its drop. When governments develop strict rules that restrict its citizens from using the Ethereum coin, it could be a great reason to make it fall.
Lastly, hacking attempts targeting bigger Ethereum coin reserves could be an element that can cause the price of the asset to depreciate. This was witnessed in December 2017 when Bitcoin bank reserves in South Korea were hacked and then stolen. The hacking attempts at another cryptocurrency had a ripple effect across others. They all lost their worth in a matter of weeks and months after the heist was successfully done. Owners of Ethereum did not expect any misery like that to befall the technology behind cryptocurrencies.
Finally, Ethereum coin is a currency that may fluctuate anytime due to unusual situations that may catalyze its rapid fall. Those who wish to use it as a form of transacting business activities should be ready for its drop and rise. It may fall to far lower levels depending on the magnitude of situations contributing to its fall. We should expect a rapid drop of fifty to eighty percent when a meltdown hits the Ethereum coin before it can slowly recover.