The price of Ether (ETH) surged by 6.2% from Nov. 3 to Nov. 5, but the altcoin is facing difficulty breaking the $1,900 resistance. Despite the current bullish trend, Ether’s 17% return over the last 30 days falls short of Bitcoin’s (BTC) impressive 27% gain during the same period.
Regulatory hurdles and ecosystem centralization critiques linger
Analysts attribute some of Ether’s underperformance to uncertainty surrounding Consensys, a key player in the Ethereum ecosystem. Former employees have filed a lawsuit against the company and its co-founder Joseph Lubin. Over two dozen shareholders of the Swiss holding company, Consensys AG, claim that Lubin, who is also a co-founder of Ethereum, violated a “no-dilution promise” made in 2015.
Consensys is responsible for developing and hosting infrastructure projects crucial to the Ethereum network. It was founded in October 2014, about nine months before the Ethereum blockchain launched in mid-2015. Furthermore, the High Court of Zug in Switzerland ruled in favor of the plaintiffs, exacerbating the current uncertainty.
Regulatory challenges have hampered the growth of the Ethereum ecosystem. The latest concern centers around PayPal’s U.S. dollar-pegged stablecoin, PYUSD, which operates on the Ethereum network. This token is designed for digital payments and Web3 applications. On Nov. 2, PayPal disclosed a subpoena it received from the United States Securities and Exchange Commission.
In addition to regulatory pressures, there has been notable criticism of the decentralization of financial applications within the Ethereum network. Chainlink, a preferred solution for oracle services, quietly reduced the number of participants in its multisignature wallet from four out of nine to four out of eight. Analysts have highlighted the lack of governance by regular users as a significant issue.
Ether’s underperformance to altcoins is evidence of other issues
Several major altcoins — including Solana’s SOL (SOL), XRP (XRP) and Cardano’s ADA (ADA) — have outperformed Ether, with returns of 75.5%, 37% and 35% in the last 30 days, respectively. This discrepancy…
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