Ethereum is the second-largest cryptocurrency around the world, which is very popular among investors. With a new update to come, more people than ever before are looking forward to the way the cryptocurrency can change, and what this change might cause in terms of its market performance.
On May 23, for the first time in over a month, the price of Ethereum’s coin, ether, fell below $1,800 as the price collapsed over 60 percent compared to the highest price it reached, around $4,362. Although the cryptocurrency saw a quick recovery, reaching almost $3,000 by May 26, the price fell below $2,000 once again on June 21.
With the upcoming major update on the horizon, which is said to be a game-changer for the whole market, many believe that ether might have a rebound, and even increase to new highs. This can actually be quite possible, especially considering the current attitude towards mining and its impact on the environment.
As crypto trading is becoming more accessible for everyone, thanks to the online crypto exchanges, the changes can happen in no time. As of today, there are millions of crypto traders around the world, many of them choosing to invest in Ethereum because of its future prospects.
Investing in cryptocurrencies has never been easier. There are numerous crypto exchange applications that traders can download and start buying and selling cryptocurrencies. People don’t even have to conduct research in order to make decisions about their positions. Everything is becoming automated.
This is mostly doable thanks to companies like Bitsgap, which develop trading bots for the crypto market. The Bitsgap’s auto trading bot is capable of analyzing the market in just a few minutes, it can even open buy and sell positions. This is making the market even more accessible for traders.
Ethereum’s stance in the crypto market
Ethereum is the second-largest cryptocurrency around the world after bitcoin. The market capitalization of Ethereum is over $226 billion, and there are as many as 116 million ether coins in circulation.
The new upgrade, which was announced by the company last year, was designed to increase the scalability and security of the network. In addition, it was also noted by the team behind the company that the network will be shifting from the proof-of-work, PoW consensus, which is also used by bitcoin, to a new proof-of-stake PoS algorithm.
In addition to this, the new upgrade will also include an Eth1 PoW, and Eth2 software, and protocol layers. Because of the upgrade, Ethereum is said to become more environmentally friendly, secure, and transparent. It is also said to decrease the fees associated with Ethereum.
Many have also started talking about the possible chance for Ethereum to become even more popular than bitcoin. Nathan Cox, the representative of Two Prime, said that in the future, Ethereum has a chance of overcoming bitcoin’s popularity. While talking about the possible future of Ethereum, he also noted that while bitcoin is the digital version of gold, Ethereum can be seen as digital oil.
In addition, it was also reported a few weeks back that Goldman Sachs was planning to launch futures and options contracts on Ethereum, in addition to the futures of BTC. The head of Goldman Sachs digital assets, Mathew McDermott talked about the adoption of Ethereum derivatives. This could further influence the price changes of Ethereum.
Main changes coming with Ethereum 2.0
Ethereum 2.0, simply called ETH2, is a set of interconnected updates to the already existing network of Ethereum. The new update of the network will mainly focus on the security and sustainability of the Ethereum ecosystem, which could potentially influence Ethereum’s place in the current cryptocurrency market.
Some experts say that the update might have a huge impact on Ethereum’s price, in fact, it might lead to a major rebound of ether’s price. As of today, Ethereum is traded similarly to other cryptocurrencies in the market. Although it is a very popular cryptocurrency in the market, there are some environmental issues associated with it as of today.
Today, as we have already said, Ethereum uses proof of work, while the upgrade will be using the proof of stake system. While the current system PoW uses a lot of energy and very complex math puzzles for transaction verification, the newer PoS features transaction verification from validators and not miners.
To put it simply, the addition of another block to the blockchain is done by validators acknowledging the block, which reduces the complexity of the whole transaction and makes it more user-friendly.
One of the biggest issues that people have towards cryptocurrencies is their environmental impact. This is a problem of the whole market, not only some of the cryptocurrencies. The changes coming with Ethereum 2 are thought to have a huge influence on the price of the cryptocurrency.
2021 has already been a successful year for the whole cryptocurrency market, including Ethereum and bitcoin. Both of the cryptocurrencies hit historical all-time highs, further increasing the popularity of the crypto trading market.
Market experts expect ether to rise as the cryptocurrency transitions to Ethereum 2.0. However, it is still very hard to say how the crypto prices might change in the coming months or years mainly because of the high volatility of the cryptocurrency market.