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Ethereum Price Has It Hard to Climb as regulatory scrutiny weighs on digital currency

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Bitcoin prices were on the rise Thursday but Ether tokens slipped for a third straight session as recent regulatory moves provided a slight headwind to the world’s second largest digital currency.

A single bitcoin BTCUSD, +2.09%  was trading up about 4.6% at $2,667.12, while Ether, the digital currency operating in the Ethereum network, was trading 1.4% lower at $202.10.

Robert Viglione, co-founder of Zencash, a privacy-oriented, digital-currency platform, told MarketWatch that a recent announcement from the Securities and Exchange Commission, signaling that it was scrutinizing a recent torrent of so-called initial coin offerings, or ICOs, has cooled Ether’s price. ICOs refer to previously unregulated offerings of digital currencies, many of which were tied to the Ethereum blockchain, Viglione said.

“People were issuing coins on top of the Ethereum blockchain, so it was a demand boost for the Ether token,” he explained.

Blockchains refer to the digital record of transactions shared among a distributed network of computers, using coding to allow participants within the network to conduct one-on-one transactions without an intermediary. Different currencies use different blockchains.

On the upside, Viglione said additional regulation could be a longer-term boon for the nascent digital-currency industry. “Now we are buying down some of the uncertainty, but at the same time projects that do get funding [through ICOs] will be higher quality,” he said.

Bullish market participants see bitcoin’s price climbing in the near term after so-called miners, who power the blockchain by virtually mining for tokens, backed a new piece of software, known as Segregated Witness, or SegWit, that is designed to boost bitcoin’s processing power.

A smaller faction continues to pursue plans that could split the world’s largest currency but industry experts say those efforts aren’t likely to gain traction at this point.

Separately, U.S. authorities on Wednesday arrested Alexander Vinnik, 37, a Russian citizen, the owner and operator of multiple BTC-e exchange accounts, for allegedly operating an unlicensed money service business, money laundering and related crimes. The indictment alleges links to the laundering of money stolen during a hacking of Mt. Gox, a bitcoin exchange.

More broadly, the value of some of the more popular digital currencies, including bitcoin and Ether, stands at about $88.2 billion, with bitcoin representing about 48% of 100 cryptocurrencies tracked by digital-currency site CoinMarketCap.com,


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Source marketwatch
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