© Reuters Ether (ETH) Dips to 2-Month Low After U.S. Official Decision
CriptoFácil – Ether (), the second largest cryptocurrency on the market, fell to its lowest level in two months this Friday (10) after the New York attorney general classified the digital asset as a security. Securities, in the financial market, are assets that represent a way of raising funds for companies, governments and other entities.
Ether price dropped 10% after pulling back from $1,539 (R$7,950) on Thursday to a weekly low of $1,379 (R$7,123). According to data from CoinGecko, this is the lowest price for the cryptocurrency since January 10th. At the time of writing, Ether is trading at $1,411 (R$7,288), but is still down 8.5% daily.
Furthermore, the current price represents a drop of more than 70% from its record high of $4,878 recorded in November 2021.
ETH price chart over the last 24 hours. Source: CoinGecko As the second largest cryptocurrency by market cap behind , has a market cap of $168 billion.
Ether (ETH) is left
The fall of the largest altcoin (digital currency alternative to Bitcoin) on the market coincides with a general market devaluation. BTC, for example, has retreated 8.1% in the last 24 hours.
However, the ETH case is noteworthy because New York Attorney General Letitia James on Thursday referred to the digital asset as a security. James made the reference in his lawsuit against KuCoin. The prosecutor accuses the cryptocurrency exchange of not registering with the state before facilitating cryptocurrency transactions on its platform.
The argument supporting the thesis that Ether (ETH) is a security gained momentum after the Ethereum network migrated to a “proof of stake” system in 2022. Prior to that, the network relied on the “proof of work” system , which involved mining to secure the blockchain.
But in the new PoS system, the staking process replaces mining. In this way, Ether holders can lock their cryptocurrencies to secure the network and earn income from it.
“The move to proof-of-stake has significantly impacted core functionality and incentives to own ETH, because ETH holders can now profit just by participating in staking,” the lawsuit reads.
This move from PoW to PoS has led to increased scrutiny by regulators and has contributed to the debate over whether Ether should be classified as a security. This would subject cryptocurrency companies involved with ETH to stricter oversight.