After Rising 1, 000%, Uncertainty Clouds Ether – s Price Projections

The price of ether, the native token on the ethereum toneel, rose modestly yesterday, climbing almost 5% after its developers executed a hard fork to restore funds from a defunct project once heralded spil its greatest success story.

While the total ramifications of the deeds taken to rescue investors have arguably yet to be seen, the decision puts to surplus weeks of uncertainty ter the broader ethereum community that could be seen te its markets. Ter latest weeks, the demise of the The DAO has stalled ether’s rapid price growth, halting its meteoric rise of more than 1,000% te Q1.

Spil for where the price of ether goes from here, market experts were largely split ter their predictions.

Most emphasized that while both ether and Ethereum face significant uncertainty ter the short-term, the so-called “DAO hack” could prove beneficial te the long-term.

Max Boonen, founder of market maker B2C2, wasgoed one observer who predicted the market would instantaneously benefit from the fork, but that this would soon give way to larger questions about ether’s value.

Boonen told CoinDesk:

“Reductions ter uncertainty always lead to a ease rally. Ter the brief run, the question here is whether the ease rally is overheen.”

Widespread uncertainty

Overall, a majority of market observers spoke to the uncertainty that ether faces moving forward from the hack. Most noted that the digital currency has only bot trading since 2015, making its market less mature than bitcoin’s, which has (arguably) existed since the very first block wasgoed mined ter January 2009.

Petar Zivkovksi, director of operations for bitcoin trading podium Whaleclub, went so far spil to predict ether will now come in a “period of good uncertainty” following the fork.

“I expect some volatility but wij’re also dealing with a crypto market that is ‘tired’ of massive swings, so those may be subdued,” he said.

He also spoke to potential headwinds, emphasizing that high volumes have waterput a sell pressure on the market.

Investor and entrepreneur Vinny Lingham also commented on the price fluctuations ether will likely practice ter the short-term.

Lingham, whose fresh startup Civic uses blockchain tech, went so far spil to predict bitcoin could benefit from uncertainty te the ether markets spil money exits for safer waters.

“Some volatility is to be expected,” he told CoinDesk. “A non-material amount of Ether holders will exchange ETH for BTC, driving up BTC prices temporarily and causing a flash crash te ETH.”

Immutability question

One of the more active conversations to emerge from the hard fork is the debate overheen whether “immutability” is a defining characteristic of a blockchain, and therefore a quality that is necessary to support the value of its token.

Of note is that many te the bitcoin community have criticized the hard fork spil one that shows ethereum’s blockchain can be switched, undermining the verhoging’s capability to lay voorkeur to this attribute.

However, when asked, most market observers chose to position the hard fork spil a sign of “progress” ter the ethereum community, emphasizing that this challenging event could prove beneficial ter the long run.

Chris Burniske, analyst and blockchain products lead for investment manager ARK Invest, addressed the question of immutability by stating he believes ether’s market is developing differently than bitcoin’s.

“Ethereum has a different value proposition than bitcoin, notably the plasticity of its scripting language and the way which the state of the network is maintained. The DAO hack and remediation has proven ethereum’s plasticity ter both regards,” he said.

Boonen also weighed ter on this question, taking aim at so-called ‘bitcoin maximalists’ by stating that he believes immutability to be an overstated feature of the bitcoin blockchain.

“Bitcoin’s blockchain can be altered too, and it has. People misconstrue public blockchains. They are nothing more than what miners determine to mine and what knots determine to validate. If enough people agree to, they can alter a blockchain te any way they want,” he said.

Others, including former Deutsche handelsbank trader and BitMEX CEO Arthur Hayes, see the event spil creating a precedent that could perhaps undermine the value of ether.

For example, Hayes went so far spil to envision a situation whereby a government regulator could pressure developers to shut down a popular ethereum service through a similar switch to its code.

“This incident clearly demonstrates that the Ethereum Foundation has some modicum of control overheen the Ethereum network. Whether or not the case is successful is irrelevant, the Foundation could be te court for years spending millions of dollars that could be used to further develop the protocol,” he said.

Possible headwinds

Others see ether facing extra resistance going forward.

Algorithmic trader Jacob Eliosoff spoke to the future prospects of the ethereum podium, which is built to support projects like The DAO, emphasizing that it remains to be seen whether other developers will succeed where its contributors failed.

“It may take a few weeks for people to be convenient that the DAO nightmare is overheen, and meantime there is risk of further exploits,” he said.

Eliosoff indicated that traders may be looking to see if the difficulties The DAO’s developers faced te using ethereum’s solidity clever contracting language will hold back adoption or lead to other project failures. Still, he wasgoed largely optimistic, despite concerns.

“Assuming no major bugs, I would expect the ETH price to resume its upward trend since the begin of the year, at least spil long spil developers and entrepreneurs maintain their swift progress,” he told CoinDesk.

Burniske also provided some bullish remarks, thought he included the caveat that this depends on whether developers are able to proceed to launch successful projects on ethereum.

“Overheen the coming months the community can get back to ‘creation’ spil opposed to ‘remediation and maintenance,’ which should proceed to budge request for ether up and to the right,” he said.

Going forward, only time will tell how quickly the ethereum community will budge forward from this event. However, should the software podium progress spil much spil bitcoin has overheen the last seven years, ether prices may hold significant upside potential.

Balloon picture via Shutterstock, Price chart via Poloniex

The leader ter blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a rigorous set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests te cryptocurrencies and blockchain startups.

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