Ethereum Faces Steep Price Hurdles Amid Light on Regulatory and Security Issues

Ethereum’s price failed to clear the $2,320 resistance on December 15th and soon fell thereafter. The most recent price decline has been attributed to negative regulatory remarks as well as a hacking incident involving the entirety of Web3. Weak activities on the Ethereum network and statements by an ex-Ethereum developer seem to have also contributed towards this fall.

Causes Of Ethereum’s Recent Slump

Exchange-traded funds (ETFs) also affected the price of Ethereum. In particular, BlackRock, which manages $ 9 trillion in assets), announced on November 9th that it would launch an Ethereum spot ETF. On November 21st the enthusiasm grew even further when Bloomberg ETF analysts put odds on a Bitcoin ETF being approved before January 10th at a respectable nine out of ten. Coinbase, however, was among those client requests rejected by the US Securities and Exchange Commission (SEC) on December 15. The regulatory outlook took a turn for the worse as a result. SEC Chair Gery Gensler the laws currently on the books can be applied to crypto markets, and there is an urgent need for regulatory actions.

Another factor putting pressure on Ethereum’s price was the December 14th hack against Ledger, where a phishing attack compromised intermediary software between Ledger hardware wallets and decentralized applications (DApp), due to use of an old staff member’s account.

Challenges Within the Ethereum Network

Ethereum remains beset by obstacles that work to the advantage of competing blockchains like Solana and Avalanche. Ethereum transaction fees average $9. 90, which makes most transactions impossible; users are forced to resort to complex and even dangerous Layer-2 methods of operation.

Since November 30, the total value locked (TVL) in Ethereum has fallen by about half a million ETH and is close to its lowest level since August last year. On the other hand, TVL on Solana rose 14 % in SOL terms during this period. Although not all DApps need large deposits, DeFi applications are polishing their liquidity pools. Ethereum’s DApp mix still hasn’t been over $ 1.8 billion a month; Solana and Avalanche ‘day digital asset trading volumes were respectively at the level of US $ 700 million per day, and its daily average had risen by more than one fifth point from late November to now (surpassing that of Bitcoin).

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Disclaimer: This article is for reference only, and does not constitute investment advice. High volatility and risks Cryptocurrencies need to be independently researched by investors.

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