As Ethereum prices shed another 10% on Thursday morning, it seems appropriate to ask big questions: Were Ethereum prices in a bubble? Is that why ETH prices are crashing? Or is there a different explanation?
My initial reaction is that, no, Ethereum prices were not in a bubble.
However, it’s important to question our own assumptions. So let’s take a more thoughtful look at whether or not the current slump is justified.
Ethereum prices really took flight in the final quarter of 2017. After months of trading sideways, the second-biggest cryptocurrency exploded past $400.00. The momentum carried the ETH price beyond $1,400 by January 2018, but then market sentiment turned sharply bearish.
Well, if memory serves, the bullish trajectory formed after two exchanges gained approval for a Bitcoin futures contract. Investors saw this as a legitimization of cryptocurrencies. They envisioned a clear roadmap that, moving forward, would justify any and all valuations for digital assets.