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September was a rough month for crypto investors, in particular for those betting big on ether, the token tied to the ethereum blockchain.

Ether dropped 13% for the month, its second-biggest monthly decline in the past year, behind only a 16% slide in June. Bitcoin fell 7% in September.

It’s difficult to link short-term price movements to any specific event, and with the historic rally in crypto over the past 12 months, pullbacks are to be expected. Ethereum, the second most-valuable cryptocurrency behind bitcoin, is still up about 830% in the past year.

Investors are now buying the September dip. On Friday, the first day of October, ether and bitcoin both climbed over 9%.

Ether 12-month price chart
CNBC

But the September roller-coaster reflects a particularly rocky stretch for the ethereum ecosystem, which has given investors and developers reasons for concern.

The speed of the network and high transaction fees continue to be a problem. The “London” upgrade in August was supposed to make transaction fees less volatile, but it’s had a limited effect.

Meanwhile, rival blockchains dubbed “ethereum killers” are taking advantage of ethereum’s challenges.

Ethereum also unexpectedly split into two separate chains in late August, after someone exploited a bug in the software that most people use to connect to the blockchain. That exposed the network to an attack, and not for the first time.

“All these factors could be having some impact on the speculation side, no doubt,” said Mati Greenspan, founder and CEO of Quantum Economics, in an interview. “But don’t forget that ethereum has appreciated quite handsomely so far this year and the entire market seems to be in consolidation at this time. So I wouldn’t try to read too deeply into these short-term movements.”

Still, ethereum, which serves as the primary building block for all sorts of crypto projects, like non-fungible tokens (NFTs), smart contracts and decentralized finance (DeFi), has some major hurdles to overcome to fend off the emerging competition.

Ethereum’s unexpected split

A central premise of ethereum’s security stems from the existence of only one set of virtual books, meaning you can’t create coins out of thin air. That ledger has to work, because the decentralized nature of the blockchain means there’s no rule keeper or bank that sits in the middle of transactions to act as accountant.

Ethereum developers were rightly alarmed in August when the chain split because of a bug.

“This fork temporarily created two separate records of transactions on the ethereum network – like parallel books,” said Matt Hougan, chief investment officer at Bitwise Asset Management, which created the first cryptocurrency index fund.

For a while, it was unclear whether the split would lead to a “double-spend attack,” where the same token can be spent more than once and transactions can be reversed, Hougan said. Smart contracts overseeing billions of dollars in assets could have also been at risk. Smart contracts allow people to build applications on top of ethereum with self-executing code, eliminating the need of third parties to handle transactions.

Such an attack would have been difficult to execute, since it was clear which nodes were on the correct side of the split and which were not. “But in theory, there was a risk,” Hougan said.

The good news for miners and exchanges is that most of them upgraded their software as recommended and the issue was resolved relatively quickly, said Tim Beiko, the coordinator for ethereum’s protocol developers.

Auston Bunsen, co-founder of QuikNode, which provides blockchain infrastructure to developers and companies, said it was a “responsibly disclosed vulnerability.”

“This is a reminder that blockchains in general and ethereum specifically are new and disruptive technologies,” Hougan said. “They can do amazing things – settle $1 billion transactions in minutes and program money like software – but they are not fully mature.”

Bugs keep happening

The longer-term problem for ethereum is that random glitches like this keep happening.

In April, the ethereum blockchain was hit with a bug in one of the software programs used to access it. And in November, many of ethereum’s DeFi apps temporarily went down after a Geth upgrade debacle, which led to the chain splitting in two.

Geth is short for for Go Ethereum. To access the ethereum blockchain, operators and miners have their pick of software. Most use Geth, which accounts for 64% of the network.

When the ethereum blockchain broke in half a few weeks ago, it was because Geth had a bug in its consensus mechanism. That’s what creates the single source of truth for transactions so everyone sees the same thing regardless of what software they’re using.

Developers discovered the bug, put out a new release with a fix and publicly told everyone to update. A lot of users upgraded, but others didn’t. When an unknown actor exploited the bug, ethereum forked, meaning that it broke into two separate chains: one for those who had updated their software and one for those who had not.

Ethereum “sought the veneer of decentralization by having many clients, but as a consequence, they have incompatibilities,” said Nic Carter, co-founder of blockchain data aggregator Coinmetrics.

When the software programs don’t talk to one another, it creates problems for the network.

Bitcoin takes a very different approach. It relies on a highly secure software program for nodes to access the blockchain. Bitcoin developers have long sought to avoid hard forks at all costs, so all changes in the core software tend to be opt in rather than pushed out to users, according to Carter.

“Ethereum prioritizes faster development, but that comes at the cost of a more fragile set of software implementations,” Carter said.

Some crypto experts attribute ethereum’s success to its first-mover advantage. Most NFTs and 78% of DeFi apps, or dApps, run on ethereum, according to the website State of The Dapps.

That’s starting to change, thanks to the growing popularity of rival blockchains. 

Even before this latest split in the blockchain, users were complaining about ethereum’s heavy congestion and high transaction fees, which touched a record of $70 earlier this year, and just this week, bounced from $20 to $46 and back down to $32. 

‘Ethereum killers’

At current prices, fees continue to drive some users away.

They’re turning to blockchains like Cardano, a platform used to build dApps, and Solana, whose native coin has risen nearly 4,800% since September 2020. Launched last year, Solana is gaining traction in the NFT and DeFi ecosystems because it’s cheaper and faster to use than ethereum.

Solana processes 50,000 transactions per second, and its average cost per transaction is $0.00025, according to its website. Ethereum can only handle roughly 13 transactions per second and transaction fees are substantially more expensive than on Solana. 

Institutional money is flowing. Solana just closed a $314 million private token sale led by Andreessen Horowitz and Polychain Capital.

Investors who had been largely focused on ethereum “have been increasingly diversifying their holdings to other cryptocurrencies, fueling alternative blockchains like Algorand, Solana and Cardano,” said Mark Peikin, CEO of Bespoke Growth Partners.

Bunsen tells CNBC that while Solana is making good strides in terms of being a usable blockchain, it’s not yet decentralized enough to satisfy the larger crypto community.

It’s also not immune to bugs. Last month, Solana suffered a 17-hour outage following a denial-of-service attack, which took the form of a flood of transactions caused by bots.

The list of so-called ethereum killers is long, and includes blockchains like Matic and Polygon, which are complementary to ethereum, according to Bunsen, as well Cardano, which is known for its security.

“I think some of those ethereum killers will make it,” said Bunsen. “But they won’t kill ethereum.”

Ethereum also has its own upgrade in the works. For several years, it’s been building ethereum 2.0, which is expected to be ready by the first quarter of 2022.

The makeover will move ethereum to a less energy-intensive mining process and, according to network founder Vitalik Buterin, could boost speed by over 7,000-fold to 100,000 transactions per second.

If it’s successful, Bunsen said, ethereum 2.0 will be a “huge upgrade in terms of throughput to the ethereum network and a huge win for the environment generally.”

WATCH: Here’s what the ethereum upgrade means for ether and miners

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

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Intuit shares drop as quarterly forecast misses estimates due to delayed revenue

Intuit CEO Sasan Goodarzi speaks at the opening night of the Intuit Dome in Los Angeles on Aug. 15, 2024.

Rodin Eckenroth | Filmmagic | Getty Images

Intuit shares fell 6% in extended trading Thursday after the finance software maker issued a revenue forecast for the current quarter that trailed analysts’ estimates due to some sales being delayed.

Here’s how the company performed in comparison with LSEG consensus:

  • Earnings per share: $2.50 adjusted vs. $2.35 expected
  • Revenue: $3.28 billion vs. $3.14 billion

Revenue increased 10% year over year in the quarter, which ended Oct. 31, according to a statement. Net income fell to $197 million, or 70 cents per share, from $241 million, or 85 cents per share, a year ago.

While results for the fiscal first quarter topped estimates, second-quarter guidance was light. Intuit said it anticipates a single-digit decline in revenue from the consumer segment because of promotional changes for the TurboTax desktop software in retail environments. While that will affect revenue timing, it won’t have any impact on the full 2025 fiscal year.

Intuit called for second-quarter earnings of $2.55 to $2.61 per share, with $3.81 billion to $3.85 billion in revenue. The consensus from LSEG was $3.20 per share and $3.87 billion in revenue.

For the full year, Intuit expects $19.16 to $19.36 in adjusted earnings per share on $18.16 billion to $18.35 billion in revenue. That implies revenue growth of between 12% and 13%. Analysts polled by LSEG were looking for $19.33 in adjusted earnings per share and $18.26 billion in revenue.

Revenue from Intuit’s global business solutions group came in at $2.5 billion in the first quarter. The figure was up 9% and in line with estimates, according to StreetAccount. Formerly known as the small business and self-employed segment, the group includes Mailchimp, QuickBooks, small business financing and merchant payment processing.

“We are seeing good progress serving mid-market customers in MailChimp, but are seeing higher churn from smaller customers,” Sandeep Aujla, Intuit’s finance chief, said on a conference call with analysts. “We are addressing this by making product enhancements and driving feature discoverability and adoption to improve first-time use and customer retention.”

Better outcomes are a few quarters away, Aujla said.

CreditKarma revenue came in at $524 million, above StreetAccount’s $430 million consensus.

At Thursday’s close, Intuit shares were up about 9% so far in 2024, while the S&P 500 has gained almost 25% in the same period.

On Tuesday Intuit shares slipped 5% after The Washington Post said President-elect Donald Trump’s proposed “Department of Government Efficiency” had discussed developing a mobile app for federal income tax filing. But a mobile app for submitting returns from Intuit is “already available to all Americans,” CEO Sasan Goodarzi told CNBC’s Jon Fortt.

Goodarzi said on CNBC that he’s personally communicating with leaders of the incoming presidential administration.

On the earnings call, Goodarzi sounded optimistic about the economy.

“Our belief, which is not baked into our guidance, is that we will see an improved environment as we look ahead in 2025, particularly just with some of the things that I mentioned earlier around just interest rates, jobs, the regulatory environment,” he said. “These things have a real burden on businesses. And we believe that a better future is to come.”

WATCH: H&R Block, Intuit shares fall after report Trump administration is considering a free tax-filing app

H&R Block, Intuit shares fall after report Trump admin considering a free tax-filing app

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Bluesky CEO Jay Graber says X rival is ‘billionaire proof’

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Bluesky CEO Jay Graber says X rival is 'billionaire proof'

Bluesky has surged in popularity since the presidential election earlier this month, suddenly becoming a competitor to Elon Musk’s X and Meta’s Threads. But CEO Jay Graber has some cautionary words for potential acquirers: Bluesky is “billionaire proof.”

In an interview on Thursday with CNBC’s “Money Movers,” Graber said Bluesky’s open design is intended to give users the option of leaving the service with all of their followers, which could thwart potential acquisition efforts.

“The billionaire proof is in the way everything is designed, and so if someone bought or if the Bluesky company went down, everything is open source,” Graber said. “What happened to Twitter couldn’t happen to us in the same ways, because you would always have the option to immediately move without having to start over.”

Graber was referring to the way millions of users left Twitter, now X, after Musk purchased the company in 2022. Bluesky now has over 21 million users, still dwarfed by X and Threads, which Facebook’s parent debuted in July 2023.

X and Meta didn’t immediately respond to requests for comment.

Threads has roughly 275 million monthly users, Meta CEO Mark Zuckerberg said in October. Although Musk said in May that X has 600 million monthly users, market intelligence firm Sensor Tower estimates 318 million monthly users as of October.

Bluesky was created in 2019 as an internal Twitter project during Jack Dorsey’s second stint as CEO, and became an independent public benefit corporation in 2022. In May of this year, Dorsey said he is no longer a member of Bluesky’s board.

“In 2019, Jack had a vision for something better for social media, and so that’s why he chose me to build this, and we’re really thankful for him for setting this up, and we’ve continued to carry this out,” said Graber, who previously founded Happening, a social network focused on events. “We’re building an open-source social network that anyone can take into their own hands and build on, and it’s something that is radically different from anything that’s been done in social media before. Nobody’s been this open, this transparent and put this much control in the users hands.”

Part of Bluesky’s business plan involves offering subscriptions that would let users access special features, Graber noted. She also said that Bluesky will add more services for third-party coders as part of the startup’s “developer ecosystem.”

Graber said Bluesky has ruled out the possibility of letting advertisers send algorithmically recommended ads to users.

“There’s a lot on the road map, and I’ll tell you what we’re not going to do for monetization,” Graber said. “We’re not going to build an algorithm that just shoves ads at you, locking users in. That’s not our model.”

Bluesky has previously experienced major growth spurts. In September, it added 2 million users following X’s suspension in Brazil over content moderation policy violations in the country and related legal matters.

In October, Bluesky announced that it raised $15 million in a funding round led by Blockchain Capital. The company has raised a total of $36 million, according to Pitchbook.

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

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Alphabet shares slide 6% following DOJ push for Google to divest Chrome

Jaque Silva | Nurphoto | Getty Images

Alphabet shares slid 6% Thursday, following news that the Department of Justice is calling for Google to divest its Chrome browser to put an end to its search monopoly.

The proposed break-up would, according to the DOJ in its Wednesday filing, “permanently stop Google’s control of this critical search access point and allow rival search engines the ability to access the browser that for many users is a gateway to the internet.”

This development is the latest in a years-long, bipartisan antitrust case that found in an August ruling that the search giant held an illegal monopoly in both search and text advertising, violating Section 2 of the Sherman Act.

The potential break-up would include preventing Google from entering into exclusionary agreements with competitors like Apple and Samsung, part of a set of remedies that would last 10 years.

CNBC’s Jennifer Elias contributed to this report.

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