Keep your eye on $ETH or Ethereum's major weakness

Investors in Ethereum have seen massive rises in price over the past month – but that's all going to end soon. I'm not certain, of course – nobody can know absolutely what's going to happen in any market, cryptocoin or otherwise. But what I'm seeing and what I'm hearing is that a coin that went from around $240 to nearly $400 in a month isn't going to stick there for long. Not because of investors getting jumpy, necessarily, but because of the reasons for the rise.

A whole bunch of companies have launched ICOs in the past month. An ICO is an initial coin offering – similar to an IPO, but instead of stocks, we have cryptocoins. Each company has their own coin and each coin is worth an amount of Ether equal to what investors will pay.

When a company opens an ICO, they sell their coins and get a bunch of Ether in exchange. Ether can then be traded for USD – cash – but most companies have not yet done such a trade. They see the price of Ether rising, and they're understandably excited, and are holding on until a point at which the price seems to be rising no further – or the point at which they need to cash in.

Other coins can do something similar – Bitcoin can also be used in this way, for example. But not exactly. As crypto investor / trader WhalePanda suggests, "Ethereum's sole use case at the moment is ICOs and token creation". That's a problem – that's THE problem. WhalePanda's column "I was wrong about Ethereum" is just about the most solid set of arguments for the existence of the Ethereum bubble out in the wild now. The following brief Tweet-thread also makes the case.

Ethereum price will continue to rise just so long as no giant startup runs an ICO then cuts and runs or otherwise royally messes up their business. Likewise, Ethereum price will continue to rise if there's no network split or there's no discoveries of a bug or bugs in smart contracts. Ethereum prices will continue to rise just so long as new, better companies continue to launch ICO projects, and launch them often.

There's a lot that could go wrong. If you've got a lot of cash in $ETH right now, I recommend you keep your eye on it. Fortunes could change at any time.