Despite the successful execution of the highly anticipated Byzantium hard fork, the price of Ether, Ethereum’s native cryptocurrency, has struggled to recover beyond the $300 mark.
In September, prior to China’s nationwide ban on initial coin offerings (ICOs) and cryptocurrency trading, the price of Ether neared the $400 region, as optimism towards the Ethereum network began to increase at a rapid rate in China, Japan, and South Korea.
Since then, the price of Ether has declined from around $390 to $280, as the cryptocurrency market endured several major corrections in the past week. The price of Ripple, Litecoin, Bitcoin Cash, and Bitcoin have all declined in the past few days, as the price of bitcoin decreased from $6,199 to $5,860.
The Byzantium Hard Fork and Optimism Around Ethereum Development
As it did with previous rallies and price surges, the successful execution of the Byzantium hard fork was expected to have a positive impact on the short and mid-term price trend of Ether. Vitalik Buter, the co-founder of Ethereum, further emphasized subsequent to the hard fork that Byzantium has been a success, and the Ethereum network has been stable since the hard fork earlier this month.
Analysts also expected the price of Ether to increase considering the progress of the Enterprise Ethereum Alliance (EEA). Some of the global finance industry’s leading institutions such as Sberbank, the largest state-owned bank in Russia, have joined the EEA to develop applications around the Ethereum network.
Sberbank senior vice president Igor Bulantsev stated:
“Our entrance to the Alliance will help broaden cooperation between leading global companies in terms of developing the Ethereum platform. The Alliance is actively developing and I hope that the bank’s expertise will be of use to all of its members. In addition, the bank will be able to influence the enhancement of the platform and its growth in the corporate sector.”
Researchers including Ivey Business school professor JP Vergne previously stated that various studies have found that developer activity has been the most accurate indicator for predicting the price trend of cryptocurrencies. So far, in 2017, the Ethereum development community has been active, with innovative developments around the Byzantium hard fork and second-layer solutions lIke Plasma that are expected to create a more efficient ecosystem for decentralized applications.
“We found that the best predictor of a cryptocurrency’s exchange rate is the amount of developer activity around it,” said Vergne.
Why is Ethereum Price Struggling to Recover?
Last week, the US Ethereum market took over South Korea to become the largest Ethereum exchange market with 33 percent of the market share. South Korea had been the leading Ethereum market throughout 2017, with increasing demand from the South Korean cryptocurrency and financial communities for Ethereum.
But, the interest towards Ethereum declined in South Korea due to the emergence of other cryptocurrencies in the market such as Zcash and Qtum. Investors and traders have started to seek out for a diversified portfolio of assets, apart from bitcoin and Ether as the main cryptocurrencies.
In the mid-term, the success of the Byzantium hard fork and rapid adoption of the Ethereum network will allow Ether to rebound and recover in value.