Ethereum price crashed after facing issues when it became clogged once again on Friday. This happened due to the Status.im ICO that was held on its network. Last week, it faced a similar problem during the Bancor ICO which lasted for a much shorter time than this time.
Problem with the Ethereum Network
During the Status.im ICO, the network saw a surge in transactions by users who wanted to take part in the ICO held by Status.im team. Several of the participants tried to set a high gas limit which resulted in higher gas prices. Since the Ethereum network is not scalable enough to handle this amount of traffic, it became to slow down causing problems. Due to this meltdown of the network, several exchanges including bittrex and bitfinex had to take down the Ethereum wallet which caused anger among many Ethereum investors. The congestion in the network took around 2 days to clear up which really showcases how big the problem is.
Ethereum Price Crash
Following the Status.IM issues, the Ethereum prices started to crash down with upto 30% decline in the prices ending the uptrend that Ethereum has been having for a long time. Also due to the wallets being down, users tried to move their funds from their wallets to the exchanges with further increased the congestion.
$40 million worth of Ethereum were sold in one go on GDAX causing the price to crash down to $0.10 which caused severe panic among the users. The price luckily recovered but showed how thin Ethereum’s orderbooks are.
The confidence among investors has reduced significantly due the issues it has faced in the last 2 weeks. The Ethereum team is working continuously to improve Ethereum network but it doesnt look like the issues are going to be resolved any time soon.
What do you feel about the future of Ethereum? Let us know in the comments.