Ethereum rose again on Thursday, absorbing all crypto assets, and this trend has already been observed twice in the market.
Ethereum seems to be going green again. Adding 14% on the day, the asset reached a price of $1,728.31, which was not achieved by any of the 20 largest cryptocurrencies (by market capitalization).
The latest rally, which brought the crypto market $200 billion in two weeks, was also fueled by Ethereum as it nears its long-awaited transition to a proof-of-stake mechanism.
As the asset continues to rise, the ETH/BTC ratio is also heading towards its all-time highs.
Could Ethereum be behind the latest bull markets?
David Hoffman, the founder of Bankless and a vocal supporter of Ethereum, believes that this asset has already caused bull markets in cryptocurrencies.
In 2017, during the boom of ICOs (Initial Coin Offerings), most of the projects started on Ethereum. In 2021, the network has made a big contribution to the growth of DeFi (decentralized finance) and NFT (non-fungible tokens). Although Bitcoin remains the first cryptocurrency on the market, most DeFi and NFT projects have chosen to launch Ethereum.
Mr. Hoffman predicts that the next bull market will also be supported by Ethereum, and according to him, the first signs are already there. The analyst backs up his point with the fact that the next bull run will be based on commissions.
“Indeed, an unsustainable Bitcoin security budget will not be an issue for about 20 years… as the ETH dollar will go through a 20-year bull market and help support the price of BTC along the way,” he said.
However, some scholars disagree with Mr. Hoffman. According to them, paying for gas in Ethereum is unacceptable for most retail investors and even whales. In addition, the merger will not automatically solve this problem, since switching to a proof-of-stake algorithm does not necessarily reduce gas fees.
Still a long way to go
The real fee reduction can only happen when the network becomes more scalable, especially with sharding and sidechains, which probably won’t happen until 2023.
Ethereum still has a long way to go before it becomes mainstream. Even its co-founder Vitalik Buterin recently stated that after the merger, the system would only be 55% complete.
In the coming years, lower issuance and staking rewards are likely to play a key role in Ethereum as investors seek long-term gains from the deflationary decentralized digital asset.
Denial of responsibility
All information on our website is published in good faith and for general informational purposes only. Any action taken by the reader based on information found on our website is done solely at his own risk.