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Ethereum drops more than 10% even after flash crash refund

Bitcoin rival ethereum dropped Monday despite a major exchange’s efforts to shore up confidence by announcing a credit for customers who lost money during last Wednesday’s flash crash.

Ethereum, also known as ether, traded 11 percent lower near $268 Monday morning, according to CoinDesk.

Last Wednesday, ethereum briefly plunged in a flash crash from above $300 to 10 cents on Coinbase’s GDAX exchange. On Friday, the exchange said it would credit customers who “experienced a margin call or stop loss order” on GDAX during the flash crash.

Ethereum three-month performance

Source: TradingView, Coinbase

Ethereum is still up about 14 percent for June, and 2,700 percent for the year, according to CoinDesk data. At its peak, ethereum had surged more than 4000 percent for the year.

In a blog post Monday, Union Square Ventures partner Fred Wilson and digital currency investor said that the decline in ethereum was profit-taking after a massive run higher in the last six months.

“My gut says we are headed for a selloff in the crypto sector,” he said in the post. But he said he remains optimistic about the future of cryptocurrencies over the next five to 10 years.

Last week, high demand for ethereum-based projects also clogged the network. The inability of ethereum to handle the orders raised worries that digital currency may soon face a debate over an upgrade model, similar to a heated controversy over bitcoin’s future that has weighed on that currency.

Two different methods for upgrading bitcoin, SegWit2x and BIP148, are set to go into effect July 21 and Aug. 1, respectively. Initially the systems were incompatible, threatening to split bitcoin in two and likely reducing its value. However, a developer announced earlier this month a way to make the two methods compatible, helping bitcoin recover from lows of the month.

Bitcoin traded just over 1 percent lower Monday near $2,553, still up about 10 percent for the month and 165 percent higher for the year, according to CoinDesk.

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