It’s no surprise that there was a lot of Bitcoin/FIAT made during the elusive ICO era brought on to us by blockchains such as Ethereum and NEO. With the notion of making money at hand however, scammers and corrupt companies were quick to emerge.

With bans from China for cryptocurrency trading and ICO’s many people were thinking that this was negative news for Bitcoin, along with other countries doing the same.

Now let’s stop for a moment here.

Countries banning illegal practice of investing and trading is considered negative in the cryptocurrency space? We need to stop and think for a moment.

A: Do we want:

A cryptocurrency community that is divided by the likes of scammers, and investors. Scammers make up 5% of the industry, there are still 95% of amazing people out there that are genuinely into cryptocurrencies.

B: Or do we want:

A safe experience where users can easily buy/sell cryptocurrencies. A place where users can invest without being scammed, with actual financial regulations put in place that prevent businesses from operating such dodgy operations.

If your answer was B then the bans on ICO’s and illegal cryptocurrency trading HAD TO HAPPEN! Albeit it did slow down the uptrend of Bitcoin. However, as with any market this is A CORRECTION! We’re not going to continuously fly up to the moon, sometimes we need to go back to earn and get supplies to keep on moving until we finally hit water!

Whilst mainstream adoption could come later now, we’re on the right path that is more to the legal side of the fence. This is great news. However, many people are worried where Bitcoin, or cryptocurrencies for that are going. People are worried that after December many portfolios that are using the “HODL” strategy are down around 70%.

Where do we go from here? One question we need to ask ourselves, is how actively mined the top cryptocurrencies are, and how that could give us an idea of where things are going.

So what’s up with the Ethereum Hash Rate?

I’m not sure if you or your cat have noticed, but Ethereum’s hash rate is dropping, and it’s dropping fast:

ethereum hash rate dropping

Granted, that the hash rate has wallowed down due to the amount of ICO’s that have been failing, not funded or just users downright over it.

But that’s just the point we’re trying to make here, isn’t it?

With ICO bans happening across various countries, with no regulations put in place for ICO’s to be considered a security and no insurances by most exchanges in place – THIS WAS ALWAYS GOING TO HAPPEN, and why most people short sold Ethereum to the ground.

Now let’s take a look at Bitcoin’s hash rate and see if we find a different picture:

bitcoin hashrate increasing

The first thing that we evidently see is that it continues to grow, as does Bitcoin. But now people are going to ask, why the price is $7,000 USD approx as of writing this, instead of the $19,500 it was. The reason is the same, it was caused by ICO’s and the hype of the cryptocurrency industry with millions of ICO’s coming out with alternative cryptocurrencies that people thought were going to take them to the moon.

Whilst we can’t comment on anyone’s trading strategy at Cryptolume, we really hope that people can take the time to do a bit more fundamental analysis as part of their ongoing strategies. A lot of trading in cryptocurrencies is based around understanding market sentiment and the technology, given it’s new and emerging that could have heaps of faults and flaws for years to come.

What does this spell for Ethereum?

One thing for sure is that the era of ICO’s that we once knew are over. With bans coming from across the globe, and regulations slowly forming into place we might one day see the resurrection of ICO’s however for now, it might be a smarter move buying directly from an exchange seeing as how every ICO dumps after listing now.

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