For more than a few weeks, Ethereum has experienced a sharp rise in price. This can be linked to investors anticipating the upcoming Constantinople hard fork. The fork has been viewed as bullish for a while now because it reduces the future supply of Ethereum by about 33%.
Ethereum (ETH) Price Today – ETH / USD
Presently, the price of Ethereum is dipping due to the hard fork being delayed. The cause of the delay is a security vulnerability that could result in a loophole if it were implemented. This gives hackers an opportunity to exploit it and steal funds from users.
Details of the delay
The news broke that ChainSecurity, a smart contract security audit firm, noticed the flaw in one of the improvement upgrades which were included in the hard fork. This flaw is powerful enough to let nefarious actors steal funds belonging to other users.
Ethereum’s lead developers organized a conference call, discussed the flaw, and noted that it would delay the hard fork. There was no time frame given; they only delayed the hard fork for an unforeseeable amount of time until the issue is fixed. However, the new date for the implementation of Constantinople will be implemented and released in another conference call scheduled for this Friday.
The company discussed the vulnerability of the fork in a Medium post recently, referring to it as a reentrancy attack. This allows hackers to reenter the same function more than once without the network taking note of the actions they took. The allows them to withdraw funds continuously. ChainSecurity explains,
“The upcoming Constantinople Upgrade for the ethereum network introduces cheaper gas cost for certain SSTORE operations. As an unwanted side effect, this enables reentrancy attacks when using address.transfer(…) or address.send(…) in Solidity smart contracts. Previously these functions were considered reentrancy-safe, which they aren’t any longer,”
Hard fork delay causes price drop
The price of the digital asset plunged after the news of the hard fork’s delay. It is presently trading down 6% at its current price of $123. Ethereum is currently trading above its weekly low of about $116 that was set last weekend when there was a dip in the price of all digital currencies.
ETH has seen a consistent rise in price since the 2018 lows of $80 which took place in December and has risen to high of close to $160 before dipping to the present price levels. So far, it is not clear how much of this price surge is a result of the expectations of the Constantinople hard fork. This comes at a time when the crypto market has seen some recovery from last year.
When the news came to light that the fork had been paused, the Crypto Dog, a top crypto analyst on Twitter stated that he believes the minor dip in price is caused by an emotional reaction. He explained,
“Reasonings for buying this: It was at support, easy invalidation if I’m wrong… ETH is leading, dumping due to Constantinople delay – this is an emotional reaction that may be quite shortlived [sic],”
The response of Ethereum’s price to the news about the delay in a few days will determine how important the traders see the hard fork. What do you think? Do you agree with the Crypto Dog? Please share your thoughts below.
Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.