Investors withdrew $1bn worth of Ethereum in the past week.
Analysts see Russia's military action in Ukraine as the most probable reason for such withdrawals.
Why is it so important?
- This can affect the value of Ethereum
IntoTheBlock, an analytics company, reported that 327,000 ETHs, worth around $982 million, were withdrawn from cryptocurrency exchanges between 22 February and 1 March. Meanwhile, the value of one digital coin increased by 20% over the same period, climbing to $3,000.
The most likely cause of the cryptocurrency outflow is the start of the military conflict between Russia and Ukraine, which started on 24 February, and continues to the present day. In addition, the White House's appeal to cryptocurrency exchanges to prevent Russia from circumventing sanctions by using cryptocurrencies has also contributed, as some crypto projects have proactively started blocking Russian accounts.
The second most capitalized cryptocurrency with its own blockchain and asset tokenization platform. Using smart contracts, it enables the creation of tokens and various decentralized applications (DApps). Ethereum is migrating to another PoS (ETH 2.0) algorithm due to the imperfection of the PoW algorithm and high commissions.
Market dominance: 19%.
Capitalization: $400 billion
Advantages: the most developed ecosystem with smart contracts.
Disadvantages: high online fees.