Key facts:
The price of ether suffered a 54% drop in the second half of 2019.
Only 8% of Erhereum's portfolios record gains at the current ETH price.
The second largest cryptocurrency on the market, which gives life to the Ethereum blockchain, is currently traded at the price of USD 126, representing a 91% drop from its historical high of USD 1,431 reached in early January of the 2018, according to the Messari price index.
This relentless price drop has led to 90%, or 31.31 million of Ethereum's portfolios running out of "money" or losses, according to blockchains intelligence company, IntoTheBlock.
An address is said to be at a loss if the current price of the ether is less than the average price at which it was acquired or the price at which the currency was sent to an address.
This means that 31.31 million addresses acquired the cryptocurrency at an average price greater than the current price of USD 126 for each ether.
A large number of the addresses with losses bought the coins when the price of it was in a price range between USD 211 and USD 530. It should be noted that the largest group, around 4.77 million addresses, obtained the cryptocurrencies in a Price range between USD 262 and USD 352, as shown in the following graph.
About 3.58 million addresses acquired the cryptocurrency in the price range between USD 745 and USD 1,340. Since the cryptocurrency was launched, the ether had only been traded below USD 747 for only six months, from the meteoric bullish season between October and December 2017, until the price of the cryptocurrency declined in the first quarter of the 2018.
Meanwhile, there are only 8%, or 2.79 million addresses that have profits, this means that the price at which the cryptocurrency was acquired is lower than the current price of ether, and 1.78% of the addresses without losses , with an average purchase price almost equal to the current ether price.
Most of the addresses with earnings acquired the cryptocurrency in the price range between USD 0 and USD 130, although 4,120 addresses have a current balance of USD 0. These could be addresses of those early buyers, who bought the currency in the period between August and December 2015, when the cryptocurrency was traded for pennies.
Although the number of addresses with gains is small, the volume of ether that maintains these addresses is quite significant.
Only 8% of the addresses currently have profits, but these maintain 31.24% of the total number of ethers held in all directions, which is equivalent to 34.05 million ethers (USD 4.5 billion). These investors have seen their massive profits evaporate in the last 23 months and could get rid of their cryptocurrency positions if the price found acceptance below USD 100, which would add to the downward pressure around ether
Addresses that report losses maintain 73.13 million ethers. Address groups whose cryptocurrency purchase price ranges are between USD 144 and USD 170, USD 212 and USD 262, or between USD 262 and USD 352, hold a total of 36.24 million ethers.
A devastating year for Ethereum
The number of addresses with earnings could have been greater by half of the second quarter of this year, when ether was being traded at an average price of USD 360.
In the first six months of 2019, the cryptocurrency showed an increase in the price of more than 120%, and then decreased 54% in the second half of the year.
In fact, ether is not the only cryptocurrency that has faced intense selling pressure in recent times. The market in general has received its blows, courtesy of the fall in the price of bitcoin from the high reached in June of USD 13,800 to the recent low around USD 6,400.
However, bitcoin, the main cryptocurrency, is still 103% above its price based on annual data. On the other hand, at the time of this publication ether is reporting a marginal loss with respect to one year.
Some observers believe that the persistent problems of ether scalability probably diminished investor confidence, leading to a fall in price.
"Ethereum has consistently failed to meet deadlines for protocol improvements," said Connor Abendschein, a researcher and analyst at Digital Asset Data. "It is assumed that Ethereum 2.0 should have taken effect by the beginning of this year, and this has not yet happened."
Ethereum 2.0 is a major update of the ethereum protocol that will change the current consensus algorithm of the Proof of Work to Participation Test blockchain, and transfer the validation functions of the miners to special network validators.
Under the Proof of Work protocol, miners compete with each other to solve difficult puzzles (algorithms) to include each block in the chain. Under the Participation Test protocol, there is no such competition, since the creator of the block will be selected based on the user's participation in the project, in other words, depending on the number of ethers that the user maintains.
The market is waiting for the first update to be carried out by 2020. However, Ryan Selki, CEO of Messari, thinks that the transition will not take place until 2022.
Apart from the breach of the deadlines, the sale of ethers from an early buyer is likely to cause a greater fall in the price of the cryptocurrency.
As noted by Alex Svanevik, an information scientist at Crypto Land and co-founder of the data science company D 5, an address created in 2015 has moved more than 300,000 ethers to a exchange house in the last four months.
