Ether hit a new low for the year on Tuesday, extending what’s been a brutal nine months for the world’s second largest cryptocurrency.
The digital asset’s price dropped 7 percent bringing its total decline for the year to more than 76 percent, according to data from CoinDesk. The cryptocurrency fell to a low of $180.60 after kicking off the year above $770.
Investor enthusiasm for ether is fading. Mainstream adoption isn’t here yet, investors can now bet against the market and blockchain competitors are gunning to be the top platform for developers.
Ether is the name of the cryptocurrency, but it’s closely associated with the popular Ethereum blockchain. Unlike bitcoin, which gives access to a global financial network, ether gives users access to a computer network. Its use has been compared to gasoline for a car. Developers can use ether tokens as fuel for certain functions on that blockchain.
Analysts have pointed to the recent failure rate of initial coin offerings that were built on ethereum. Many have needed to sell part, if not all, of their holdings to manage cash flow and expenses.
“Ether’s price was inflated earlier due to the ICO mania,” said Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital. “As people pledged Ether with ICOs, the supply-demand equation got skewed — now ICOs have cooled down, and hence the setback.”
Ethereum may have come first, but blockchain competitors like EOS and Stellar are moving in to dethrone it. The cryptocurrency is also dealing with short-sellers. Earlier this year, peer-to-peer trading platform BitMEX came up with a swap product that allows investors to bet against ether, which analysts say has dampened prices.
The cryptocurrency’s 2018 performance is a sharp contrast from last year. Investors were excited about its utility compared to bitcoin, which can’t be used to build blockchain applications and is mostly seen as a speculative investment or a store of value.
Even when bitcoin’s price jumped to almost $20,000, ether was a better bet in 2017. Bitcoin rose 1,318 percent from Jan. 1 to the end of the year, according to CoinMarketCap.com. In the same time period, ether rose 9,162 percent, to more than $756, after starting the year around $8