Recently, Dogecoin creator Jackson Palmer posted a video clip to his official YouTube channel where he explained how a sudden fall is caused by the frenzy around Initial Coin Offerings in the price of ether that is known as the major part of the Ethereum network.
Palmer states four different ways on why the bubble could eventually pop in his latest video. According to Jackson, it can go for an indefinite period as there is no prior arrangement for this, but I think there are lots of people here who think it’s not capable of being sustained.
- An ICO Gone Wrong
First of all, Palmer talks about the chances of ICO likely wrong very badly while discussing about the particular causes of why the bubble in the ether price pops up. He gives up the example of the DAO who was one of Ethereum’s first bigger smart contracts ICOs.
Palmer says they earned millions of dollars, but the issue was the bug in their code. Hackers got its access that results in the exploitation of this bug and robbery of millions of dollars.
The price of ether fall by over 50 percent in the period of next six results after the case of DAO. Palmer states that the DAO also displayed that the Ethereum was not capable of changing due to the decision of the developers to provide hard-forking code.
- Inadequate ICOs
As per Palmer, another cause for the ether bubble can pop is the absence of the inquisitiveness in the ICOs. He mentioned that it should self-normalize if there isn’t a new ICO each week that slows the supply and raise the price.
However, he doesn’t see it will happen in the near future. Palmer says that I think each person is presently looking on an ICO and it doesn’t look to slow down.
- Disagreement among the community
As per Palmer, the third reason for a possible decrease in the ether price was the chances of network splits. The community divided into two blockchains, named as Ethereum and Ethereum Classic. The Ethereum Classic is where individuals who don’t want to return the funds of the hacker to the token holders of DAO are available.
According to Palmer, this kind of split can occur again in the future. Lots of upcoming modifications with Ethereum are explained by the Palmer that includes switching to proof of stake whose timeline is yet unknown.
- Activities by the SEC
Lastly, Palmer says that the price of ether could bubble to pop up was due to the SEC’s actions. He says that there are pretty chances that the SEC could make a decision that several ICOs will outline the sale of unlisted securities to the investors who aren’t accredited.
He further says that this type of stuff is taken very seriously by the SEC and selling tokens to these individuals can result in some big dangers in the United Staes if they aren’t able to pass something known as Howey Test, which is the best way to find out whether an asset can be called a security legally or not?