September was a rough month for crypto investors, in particular for those betting big on ether, the token tied to the ethereum blockchain.
Etherdropped 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 becauseGeth 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.
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.”
Founded in 2022, ElevenLabs is an AI voice generation startup based in London. It competes with the likes of Speechmatics and Hume AI.
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LONDON — ElevenLabs, a London-based startup that specializes in generating synthetic voices through artificial intelligence, has revealed plans to be IPO-ready within five years.
The company told CNBC it is targeting major global expansion as it prepares for an initial public offering.
“We expect to build more hubs in Europe, Asia and South America, and just keep scaling,” Mati Staniszewski, ElevenLabs’ CEO and co-founder, told CNBC in an interview at the firm’s London office.
He identified Paris, Singapore, Brazil and Mexico as potential new locations. London is currently ElevenLabs’ biggest office, followed by New York, Warsaw, San Francisco, Japan, India and Bangalore.
Staniszewski said the eventual aim is to get the company ready for an IPO in the next five years.
“From a commercial standpoint, we would like to be ready for an IPO in that time,” he said. “If the market is right, we would like to create a public company … that’s going to be here for the next generation.”
Undecided on location
Founded in 2022 by Staniszewski and Piotr Dąbkowski, ElevenLabs is an AI voice generation startup that competes with the likes of Speechmatics and Hume AI.
The company divides its business into three main camps: consumer-facing voice assistants, integrations with corporates such as Cisco, and tailor-made applications for specific industries like health care.
Staniszewski said the firm hasn’t yet decided where it could list, but that this decision will largely rest on where most of its users are located at the time.
“If the U.K. is able to start accelerating,” ElevenLabs will consider London as a listing destination, Staniszewski said.
The city has faced criticisms from entrepreneurs and venture capitalists that its stock market is unfavorable toward high-growth tech firms.
Meanwhile, British money transfer firm Wiselast month said it plans to move its primary listing location to the U.S.,
Fundraising plans
ElevenLabs was valued at $3.3 billion following a recent $180 million funding round. The company is backed by the likes of Andreessen Horowitz, Sequoia Capital and ICONIQ Growth, as well as corporate names like Salesforce and Deutsche Telekom.
Staniszewski said his startup was open to raising more money from VCs, but it would depend on whether it sees a valid business need, like scaling further in other markets. “The way we try to raise is very much like, if there’s a bet we want to take, to accelerate that bet [we will] take the money,” he said.
Synopsys logo is seen displayed on a smartphone with the flag of China in the background.
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The U.S. government has rescinded its export restrictions on chip design software to China, U.S.-based Synopsys announced Thursday.
“Synopsys is working to restore access to the recently restricted products in China,” it said in a statement.
The U.S. had reportedly told several chip design software companies, including Synopsys, in May that they were required to obtain licenses before exporting goods, such as software and chemicals for semiconductors, to China.
The U.S. Commerce Department did not immediately respond to a request for comment from CNBC.
The news comes after China signaled last week that they are making progress on a trade truce with the U.S. and confirmed conditional agreements to resume some exchanges of rare earths and advanced technology.
The Datadog stand is being displayed on day one of the AWS Summit Seoul 2024 at the COEX Convention and Exhibition Center in Seoul, South Korea, on May 16, 2024.
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Datadog shares were up 10% in extended trading on Wednesday after S&P Global said the monitoring software provider will replace Juniper Networks in the S&P 500 U.S. stock index.
S&P Global is making the change effective before the beginning of trading on July 9, according to a statement.
Computer server maker Hewlett Packard Enterprise, also a constituent of the index, said earlier on Wednesday that it had completed its acquisition of Juniper, which makes data center networking hardware. HPE disclosed in a filing that it paid $13.4 billion to Juniper shareholders.
Over the weekend, the two companies reached a settlement with the U.S. Justice Department, which had sued in opposition to the deal. As part of the settlement, HPE agreed to divest its global Instant On campus and branch business.
While tech already makes up an outsized portion of the S&P 500, the index has has been continuously lifting its exposure as the industry expands into more areas of society.
Stocks often rally when they’re added to a major index, as fund managers need to rebalance their portfolios to reflect the changes.
New York-based Datadog went public in 2019. The company generated $24.6 million in net income on $761.6 million in revenue in the first quarter of 2025, according to a statement. Competitors include Cisco, which bought Splunk last year, as well as Elastic and cloud infrastructure providers such as Amazon and Microsoft.
Datadog has underperformed the broader tech sector so far this year. The stock was down 5.5% as of Wednesday’s close, while the Nasdaq was up 5.6%. Still, with a market cap of $46.6 billion, Datadog’s valuation is significantly higher than the median for that index.
