Credits: istock.com/Evgenii_Bobrov
For yet another day, Ethereum emerges as the big winner of the top 10 biggest cryptos.
ETH prices rose 4.95% in the last 24 hours, bringing the Ethereum to USD exchange rate to $1,213.84. Other cryptos, from Bitcoin to TRON, fell during the same time period.
Judging by Reddit threads and social media posts, investors are blaming China’s imminent ban on Bitcoin mining as the source of pessimism.
Bloomberg first reported China’s policy shift last Wednesday. Since then, one of China’s biggest mining pools has closed its doors, leading to a deep sense of uncertainty in the market.
It’s a simple case of supply and demand.
Without enough miners to verify transactions, the (already exorbitant) cost of Bitcoin payments will surge. That could, in turn, depress prices and drive investors out of the market.
Daily Ethereum Chart
Investors watched the prequel to this story last year, when China banned both initial coin offerings (ICOs) and cryptocurrency trading. Those bans served to undermine faith in cryptos, leading to an epic crash in the third quarter of 2017.
However, prices have more than recovered since then, which I took as a sign that China cannot derail the market for long. Keep that in mind if we see this crash deepen over the next week—it means that you can scoop up valuable cryptos at discounted prices.
If recent history is any indication, Ethereum could benefit enormously from Bitcoin’s woes. It is not as heavily exposed to a Chinese mining ban, plus it is not coming off an overextended rally like Bitcoin. As a result, it could attract a lot of the capital bleeding out of BTC.
Analyst Take
Although we expect more volatility from the Chinese mining ban, we do not expect as severe a crash as we saw in September of 2017. Our $1,500 Ethereum price forecast is certainly in no danger. In fact, we might have to upgrade that prediction very soon.
Source: Price Confidential
