Ether, the second-largest cryptocurrency, extended a three-day losing streak to turn lower for the year, bucking an uptrend set by most other major digital assets.
Since the beginning of November, the coin has spent 64% of its days lower, according to data compiled by Bloomberg. It is down close to 1.3% for the year after more than doubling at one point.
Ethereum, the decentralized computing platform behind the token, has been trying to scale its network for years through a series of upgrades that could eventually turn its proof-of-work protocol into a staking network. The upgrades have taken much longer than expected and some analysts doubt if this technical difficult feat is possible. In addition, a number of new entrants to the sector have put pressure on Ethereum as an increasing number of developers move toward newer options.
“Ethereum tokenomics are far more complex than that of Bitcoin,” said Mati Greenspan, founder of Quantum Economics. “Since the Ethereum blockchain has run into scalability issues on the technical side, that has prevented it from growing too much further. They are working hard to sort that out but until they do, we can only speculate as to the future value.”
And unlike Bitcoin — which has a set number of coins that can be mined — Ether has an unlimited amount, which puts further pressure on the coin, added Greenspan.
Ether’s turn lower puts it in the same league as XRP, the third-largest digital currency, which has lost more than 43% in 2019. But it’s a markedly different performance from most other major cryptocurrencies. Bitcoin, for one, is up 83% this year despite its volatile performance, while Litcoin has gained near 32%.
Ether dropped as much as 4.2% on Tuesday to trade around $127 in New York. The price reached $363 in June.