The price of Ethereum has fallen below $2,000 for the first time since April 7. The cryptocurrency’s price is now under half of Ethereum’s all-time high of $4,165 on May 12—just eleven days ago.
The market cap of Ethereum has halved accordingly, from highs of about half a trillion dollars on May 12 to current levels of about $230 trillion.
Ethereum has fallen about 18% in the past day and 45% in the past week. This is far more than Bitcoin, the largest cryptocurrency by market cap that is currently worth about $35,000; Bitcoin has fallen by about 5.5% in the past 24 hours and about 30% in the past week.
Ethereum’s latest dip follows a fortnight of tough news for the crypto market. Elon Musk kicked things off on May 12—the day of Ethereum’s all-time high—when he announced that Tesla would no longer accept Bitcoin, citing environmental concerns.
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Ethereum uses the same energy-intensive proof-of-work mining mechanism as Bitcoin. However, it’s switching to an energy-efficient consensus algorithm called proof-of-stake later this year, which the Ethereum Foundation, the non-profit that maintains the network, promises will make Ethereum 99.5% more energy-efficient.
More bad news came out of China this week. On Wednesday, three Chinese payment and banking firms warned that cryptocurrencies are highly speculative and harmful to a healthy society. On Friday, a government official added crypto mining to a list of sectors that ought to be monitored to ensure economic and social stability.
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Much of the world’s cryptocurrency mining operations are housed in China, since miners take advantage of cheap electricity rates. Combined, the news has tanked the markets and sent the price of Ethereum into freefall.