Beware of etherium
BUYER BEWARE
Here is my concern with putting new money into Ethereum right now.
The recent rise in Ethereum is more than just the typical pump/hype cycle. There are literally hundreds of ICO's that use ETH for their fundraising. And raise funds they've done indeed.
Billions of dollars of Ethereum have been traded for new tokens from ICO. So where does that Ethereum go?
These startups that started via ICO now hold hoards of ETH.
Can they pay their employees in ETH? Can they pay the power bill using ETH? Pay legal fees in ETH? Lunch even..?
The fact is that billions of dollars of Ethereum will need to be liquidated for fiat for these startups to be successful at all. Depending on the startup - it will be their choice to slowly liquidate as they need the fiat, or to dump larger holdings of ETH. To me - it seems like it would make sense to liquidate larger holdings to secure a hoard of fiat at these insanely high prices. Even Vitalik dumped 25% of his ETH in one sitting (around $8 each.)
Those heavily invested in Ethereum will say this is FUD. But this is a real concern, and it's why you won't catch me personally diving into Ethereum right now.
The fact is billions of dollars needs to exit Ethereum at some point. Only time will tell how soon and how much.
What are your thoughts?!
Thank you Drew from Cryptocurrancy collectors FB page
it's true. whoever bought at the peak will truly suffer when it all comes crashing down :(
ive seen it too many times in the past
Yeah it's a scary volatile time bro
yeah, i followed you!
Thanks bro! Upvoted and followed back
Raise some interesting points, but re: employees, I'd say yes. Lots of employees in Blockchain industry would be more than happy to accept payments in ETH.
Ethereum has certainly shot up in price recently, but I do think that much of this increase is driven by the fact that Eth is scheduled to switch from Proof of Work to Proof of Stake in the not too distant future. (Whether this actually happens within schedule is another matter)
Presuming this occurs before Nov 2017 as announced, new coins will be generated by validators who are required to invest their own Eth in a special deposit in order to virtually mine new coins. Current speculation seems to be that you will need about 32 Eth to be able to validate.
Sounds like a fair argument, and the chart speaks for itself really. You wouldn't by a stock with that chart!?
Right now FOMO is kicking hard for everyone. In my opinion it has to dive. It will go to $500usd however a correction has to come first.