Though the overall cryptocurrency market has recovered in the last 24-hour period, its preceding 24-hour period was nothing but rough weather. That is because the leading two digital currencies, bitcoin, and Ethereum (ETH) have suffered a significant drop though the latter witnessed double-digit percentage plunge. There is a belief whether all is over for ETH as it traded at levels that prevailed in September last year. Currently, the overall market cap returned to approximately $207 billion from below $190 billion seen on Tuesday.
Significantly, the notable casualty of the bloodbath was Ethereum and traded at levels of around $252 though it is a pioneer as far as smart contracts are concerned. The digital currency has plunged 82 percent after peaking to $1,400 in January this year. This triggered several speculations as to whether the crypto-coin is a sinking ship. However, the virtual asset has managed to regain some of the lost ground to add 12.6 percent to reach $283.8 on Wednesday in the Asian market.
Senior analyst, Clement Thibault, indicated that the current market trend is nothing but the continuation of a bear market impacting the digital currency sector. He pointed out that this is neither the first nor the last cyclical virtual currency to behave in this fashion. For instance, bitcoin, which is leading in market value, has witnessed more than 80 percent plunge in the past. Therefore, he does not see as something new to worry about in the digital currency market standards.
At the same time, the senior analyst thinks that it is not the end of the cycle. He sees not only bitcoin but other digital coins too to drop further before any meaningful return could come back to the market, Ethereumworldnews.com reported. Currently, there could be only one thing that might be of help to boost ETH price in the near-term. This is in respect of scaling issues of the platform.
There is a need for some kind of agreement and execution of some kind of solution as far as the platform’s scaling issues are concerned. That is because it could lift the usability further in the blockchain world. Similarly, there was some security vulnerability, which played its part in playing a spoilsport after the Parity incident. Such kind of issues should be fixed to curb projects like Zilliqa (ZIL), Tron (TRX), and EOS from gaining ground.
Some Scaling Solutions
For the Ethereum network, some of the scaling solutions are sharding, Raiden, and plasma. Sharding enables for transactions and nodes to be split into tiny groups while Raiden will scale off-chain with the help of state channel technology. Plasma uses smart contracts series to establish hierarchical trees of sidechains.
No one should forget that the same Ethereum platform was the stepping stone for a number of projects like Zilliqa, EOS, and Tron. The three have now become a rival to the digital coin. The time has come for ETH to show its mettle as to who prevails in the smart contracts segment is concerned.