The price of ether plummeted from $350 to $303 (BTC-e) on June 21, which followed an increased investor demand at the ICO launch of Status, an open source mobile DApp browser and messenger built for Ethereum.
Status raised over $94 million in its ICO drive. CNBC reported that the heightened demand clogged the Ethereum network and investors were also not able to withdraw their funds from their online wallets.
CoinDesk explained that problems started erupting quickly as users started sending transactions to the smart contract address before it began. This backlog was further accentuated as users increasingly tried to buy tokens.
"The Status.im token launch was constructed in a way that caused a huge number of transactions to be formed to chase purchases of the token, so the pools of unprocessed transactions grew large and are being worked though," said Joe Lubin, ConsenSys founder told CNBC. "We can expect many future experiments as we all figure out the most effective and fairest approaches to building these kinds of systems."
Besides Status, other Ethereum-powered projects SONM and Gilgam also raised funds through token sales last week. CoinDash Chief Executive Officer Alon Muroch told Bloomberg that a number of ICOs based on the ethereum network saw an upsurge in orders of ether and triggered a bottleneck in the network.
On June 22, ether price crashed to $13 dollar on GDAX cryptocurrency exchange, forcing it to temporarily disable ETH/USD trading. Bitfinex and ShapeShift also halted Ethereum transactions.
The congestion of the Ethereum network and the shutdown at Coinbase led Civic to halt its token crowdsale. The crowdsale has resumed today.
ETH/USD hit an all-time high at 417 levels on June 12 (BTC-e). It is currently trading at 319 levels at the time of writing.
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