Prices of digital currency ethereum plunged more than 20 percent Sunday morning, amid concerns about the recent price surge and the future of bitcoin.
Ethereum hit a low of $130.26 around 9 a.m., ET, down 22 percent from Saturday night’s prices and the lowest since May 27, according to TradingView charts of Coinbase data. As of midday Sunday, ethereum traded near $159, down about 60 percent from a record $420 hit on June 12, but still up about 1,800 percent year-to-date.
No specific reason for the move was apparent. Digital currency experts pointed to a combination of factors, including worries about a potential split in bitcoin and blockchain startups possibly selling the large amounts of ethereum they have raised in the last several weeks.
Known as initial coin offerings, the fundraisers have gained about $1.2 billion this year, with about $600 million raised in the last 30 days, according to a July report from financial research firm Autonomous NEXT.
Ethereum/US dollar two-day chart
Bitcoin also dropped, falling about 12 percent from above $2,000 to below $1,800 Sunday morning, before recovering to trade near $1,938 as of 1:07 p.m., ET, according to TradingView. Bitcoin has doubled in value this year.
Andreas Antonopoulos, author of “Mastering Bitcoin” and a teaching fellow for the masters in digital currencies program at the University of Nicosia, attributed the drop in the cryptocurrencies’ prices to a pullback after a “rapid 1,500 percent rise in two years, especially the last three months” according to a Sunday morning, ET, tweet. He also noted that concerns about the bitcoin split “is just a trigger.”
On Aug. 1, bitcoin improvement proposal 148 is scheduled to activate, and if the majority of developers don’t agree on the proposal, bitcoin could split. If that happens, Coinbase’s GDAX exchange said in a blog post July 13 the exchange “will temporarily suspend the deposit and withdrawal of bitcoin on GDAX and may pause the trading of bitcoin as well.”