Ethereum, the second largest digital currency, dropped by 2.68 percent over the last 24 hours, falling to $687.19 this afternoon after opening at $698.15.
The value of the cryptocurrency has plummeted by 17.31 percent in the last week, when Ethereum was trading at $831.64 on March 6.
The current slump is being felt across all cryptocurrency markets, amid the threat of regulation.
Why is Ethereum dropping today?
Ethereum, along with all other cryptocurrencies, is currently in the red.
The crypto market is currently being battered by warnings about its volatility with warnings that the bubble is about to burst, following a bad week.
Last Wednesday, the Securities and Exchange Commission (SEC) vowed to regulate cryptocurrencies at the same time that traders were rattled by claims of hacking in the market.
And a sell-off of crypto assets by a Japanese bitcoin holder known as the ‘Tokyo Whale’ – added to chaos in the crypto world.
Ethereum co-founder Joseph Lubin, and chief executive officer at Consensus, said it is “hard to tell” whether the cryptocurrency has lost its appeal but rejected claims that the bitcoin bubble has “burst”.
Speaking on Bloomberg News, Mr Lubin said: “We are so focused on building decentralised applications on the ethereum platform where we are so much less focussed on cryptocurrencies like bitcoin.
“Consider ether to be a crypto fuel that powers applications on the decentralised worldwide web.
“But I would argue that we’ve seen a correction in our space but calling the bubble to have been popped is a little shortsighted.
Will Ethereum rise again?
Plans are underway to make Ethereum trading more accessible for investors with the announcement of a proposed partnership between blockchain application startup ConsenSys, and TrueDigital (TDH), a global exchange subsidiary.
The digital companies’ collaboration will see the creation of a target reference index for Ether – and the move could see a significant rise in the crypto token’s value.
Sunil Hirani, founder of TDH, said: “Institutional investors and commercial partners are ready for a regulated and liquid marketplace to gain exposure to and hedge these increasingly important digital currencies and commodities.
“But the marketplace is sorely lacking the necessary foundation, infrastructure and platforms that institutional investors have come to expect in other important markets.”