Ethereum price has stabilised on Wednesday after a poor start of the week that saw the cryptocurrency hitting a 40-day low yesterday.
Bitcoin’s closest rival fell 25% during the first two days of the week, but has returned above the $200 mark in today’s trading. As of as of 16:52 BST ethereum was trading at $205.30 on the US-based GDAX exchange.
The recent decline follows a 5000-percent rise in the ethereum price since the start of the year. The online publication Business Insider quoted eToro analyst Mati Greenspan, according to whom the sharp drop was likely just a correction after such a rapid rise. Concerns over the viability of companies using Ethereum's network to raise money via so called initial coin offerings also contribute to the decline, the analyst said.
The meteoric rise of ethereum and other competing digital currencies such as bitcoin and litecoin, has prompted some prominent figures in the investment circles to express concerns of a cryptocurrency bubble. Last month tech billionaire Mark Cuban expressed his view on bitcoin, tweeting: "I think it's in a bubble. I just don't know when or how much it corrects.” And yesterday Richard Turnill, the top strategist of the world’s largest asset manager Blackrock, told journalists at a media briefing that the cryptocurrency charts looked “pretty scary”.
However, other experts, such as the CEO of Chinese bitcoin exchange BTCC, Bobby Lee, believe that the high level of volatility for these new assets is normal as their true value have yet to be discovered.