Numerous projects running on the Ethereum platform appear to have sustained the value of its cryptocurrency - Ether - thus preventing it from total collapse, despite initial speculations and the DAO breach of June 2016.
The price of Ether rose to over $20 before the DAO breach that occurred during the middle of the year. This breach saw a significant decline in the price of the cryptocurrency.
Since then, the price of Ether has hovered around the $10 region with no significant upward or downward movement in price, even when Bitcoin has experienced some reasonable volatility, especially in response to recent geopolitical events.
This development has raised certain concerns as to why the price of Ether appears to be relatively stable, despite the volatility experienced in the last few months.
A situational outcome
Hando Rand from ProofOfYou sees the situation as the outcome of a number of conflicting events. In Rand’s opinion, Ether price could be finding a balance between the positive and negative events surrounding Ethereum:
“Most ICO projects use Ethereum as a basis. Golem just had a huge success in raising in Ether. Of course from the other part, the DoS attacks and other challenges can at the same time provide a negative effect to the price.”
Thirdly, Rand states that before the DAO theft, investors saw a lot of potential in Ethereum due to DAO's success, but did not expect the attack. “That most definitely gave a strong speculative margin to the price,” he says.
The true value of Ether
Aleksandar Matanovic of EC District believes that the current price of Ether is realistic.
In his opinion, Matanovic says that the rise in the price of Ether in the first half of 2016 was an unrealistic hype. He also thinks that the problems encountered by Ethereum afterwards delivered an opportunity for a correction in price to take place.
Matanovic also thinks that the stability in the price of Ether is due to a shift in focus by the majority towards other cryptocurrencies.
In responding to Cointelegraph he says:
“Compared to the summer, when Ethereum was the hottest topic in the crypto world, it has been flying a bit under the radar during the fall. That is probably the reason for relative stability of the ETH. The same could be said for Litecoin for example, which has also been under the radar and pretty stable. The focus of the majority - and that includes speculators - has been on Bitcoin, Zcash, Monero.”
Project driven value
Liquid Ops at Omni Foundation, Patrick Dugan, presents a zoomed-in view on the price activity of Ether in recent times. Dugan is of the opinion that the value of Ether within the cryptocurrency market has not been stable. He also notes that the cryptocurrency has had about 40 percent variation in USD price since the DAO failure.
Dugan gives credit to projects that might generate revenue which run on the Ethereum platform, thus creating organic demand for the cryptocurrency, as the reason why Ether has not collapsed.
"The DAO represented one such application, and Augur is another; I do know some people in the space who are doing cool projects so basically ETH is priced in growth expectations in the overall revenue of that ecosystem,” concludes Dugan.