I said ethereum was a bubble at its peak. No one listened. It's not just ethereum - it's what the ICOs are doing to its economics, and those that can't understand destabilization will remain clueless. It's not going to the moon unless the ICOs stop, or at least majorly slow down.
Why do you think this is the case, wouldn't an increase in ICO popularity theoretically increase the value of ETH by encouraging use of the token (giving an actual use to the currency), considering the majority of these ICO's are purchased using ETH or BTC.
I'm rather impartial to both, I feel like ICO's in essence are great for the economy (minus obvious scam attempts), but definitely investors do need to place some more research into these. Unfortunately, I don't feel like regulation is the answer, as this ultimately goes against the idea of decentralized currencies in the first place.
To stabilize any currency in the world, its use needs to be well distributed. The further distributed the better, since one person dumping their complete stock will have less and less impact on the price.
Keep in mind ETH initial distribution (very concentrated) ponzi style scheme. Some of the original holders are still holding enough to make huge waves, and some will add to the dump when they see the price plummeting. But that isn't the biggest issue - it just complicates it further.
The major issue is that most of the ICOs are taking funds in ETH. ETH is bought up at market price, not putting in buy walls (which makes it more volatile), and then millions are given to one holder, and repeated over and over again, concentrating $100 million here and there. This is the exact opposite of what is needed for stabilizing a currency. Take into account the fact that only 5% is ever on exchanges, and that half of that dumped across all exchanges is what is needed to completely collapse it. 1% is what is needed to be dumped instantly on a major exchange to trigger the rest of them for a collapse. Currently that is $180 million. Let's assume that a couple ICOs are scams and want to cash out right away - what do you think will happen, especially without large buy walls since everyone bought market to dump funds into the ICO? Let's say that ALL these ICOs are legit, and they need to fund all their projects, and in so doing they need to constantly cash out by dumping ETH to have the funds. So, everyone is giving the reigns to a few, making them the elites in the ETH economy, knowing that they will have to massively dump it either way.
