Ether dips below $200 on the cryptocurrency's second day of losses

Courtney Goldsmith
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Bitcoin and ether are the most popular digital currencies (Source: Getty)

Ether, the cryptocurrency that powers the ethereum blockchain, extended a price drop to a second day as the digital currency slumped below $200 for the first time since the end of May.

The price of one ether token fell to a low of $195.14 according to CoinDesk, which aggregates prices across several exchanges.

Ethereum has had an extraordinary year, with the ether token rising more than 5,000 per cent to a high exceeding $400 from just around $8 at the start of the year.

The second-most-popular cryptocurrency's rise was driven by more mainstream attention as well as so-called initial coin offerings (ICOs), which are tokens that entrepreneurs sell to investors in exchange for cryptocurrency.

However, ether's price fell around 10 per cent yesterday and a further 15 per cent today amid new scaling issues.

Matthew Newton, market analyst at eToro, said the issues became apparent after a severe congestion in the ethereum network last month.

The price of ether has struggled since and long-term investors have had to stomach the wild volatility in return. Traders, however, will welcome such volatility as they can also sell short and profit from a falling price.

“We are still in the primitive stages of this exciting new cycle, and there is no doubt going to be twists and turns in the development of any new technology, ethereum is no different," Newton said.

“Hot money may be leaving the market right now, and developers may be converting a lot of their ICO ether to fiat currencies to support their business and hire new talent. We just need to buckle up and embrace the volatility," he said.

Bitcoin, the top cryptocurrency, was flat today at around $2,370. Bitcoin's price briefly shot up to more than $3,000 in June before falling back down to earth and ending months of continuous gains.

Read more: A London art gallery will soon accept bitcoin as payment

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