Supply and demand dictate the movement of markets. Thanks to strings of ICOs on Ethereum, the demand for Ether (ETH) has been sky-high. The multi-million-dollar question is when these bubbles will pop? When does the party end? More importantly, how might the party end?

1. One very reckless ICO

All it takes is one particularly disastrous ICO to lock up lots of Ether and force the Ethereum Foundation to do something about it, again. Hard fork or soft fork, such actions split the community and destroys value. There is already historical precedent. World-changing movements inevitably encounter great schisms — yes, usually more than one — and it would be reasonable to expect one in the future. The question is how far off into the future and how serious is the fallout?

1½. Network Schism

Speaking of schisms, the next one could just be around the corner. There are lots of issues with Ethereum and the developers at the Ethereum Foundation are addressing it. This is the main motivation to move from proof-of-work (PoW) to proof-of-stake (PoS) to achieve consensus. However, this new update will require a hard fork. Not all of the current community may be onboard, especially if they have incentive or sunk costs in the PoW infrastructure. The Ethereum Ice Age is meant to force the migration, but it is by no means fait accompli — the ETH-PoW loyalists could remove the Ice Age after the transition.

2. A lack of ICOs

Besides the cloud of uncertainty concerning the future of Ethereum, many are rather concerned about Ethereum's [lack of] capacity to handle the transitions requisite of ICOing. Status recently clogged up the entire Ethereum network raising their SNT token. Transactions don't go through because no one wants to mine the unimportant ones. All this has caused some developers to consider alternative methods to fundraising for their projects, such as a pre-pre-sale among private investors, ICOing via different cryptocurrencies (like Bitcoin or Litecoin; Ether is technically a token not a currency!), raise money the old-fashioned way, or a combination of the above.

2½. Ether prices

Once an ICO raises on ETH, the project would want to liquidate part of that for real-world operating expenses: developers don't accept ETH for salary, because they can't pay rent with ETH. If ETH is projected to crash, the project would want to liquidate as much as possible, leaving only a token amount (pun intended) for actually operating smart contracts. This is a vicious negative feedback loop: as the price of ETH depresses, projects sell off more and the price depresses further, leading to more and more projects looking at other alternative methods to fundraising.

3. ICOs become illegal

This is crypto armageddon! Not only is INTERPOL already watching every ICO like a hawk, thanks to scammers and money laundromats, ICOs in their current state are a contradiction in security law:

Most if not all ICOs so far are treated like currency rather than tokens. Not only does this violate real-world regulations — the Howey Test — it encourages behaviours that run counter to the ICO project’s grand vision. In fact, ICOs should be renamed ITOs: initial token offerings.
— Hong Kong Blockchain Society

Schrödinger's securities are unstable. The authorities — such as the SEC in the USA — may ruled that ICOs indeed does not pass the Howey Test and declare it outright illegal: unlisted securities sold to unaccredited investors. This would obliterate not just Ethereum, but all cryptocurrency markets. This is the scariest prospect because it is totally outside the realm of cryptoeconomies and all it takes is one SEC somewhere in the world to use this nuclear option. This can happen at any day. now Ironically, the destiny of a decentralized future is still at the mercy of the centralized now.

I may have misunderstood or misinterpreted some aspects of Ethereum. If there are things to be corrected, or you'd like to add more to these thoughts, please comment below. Also, I am a crypto-technologist and not a crypto-economist, so this definitely does not constitute as investment advice.