It seems that Ethereum has finally come out of hibernation in this crypto season. Over the past months, the cryptocurrency gained more than 18% to more than $3,000 per unit. This has left many investors questioning whether there is more growth potential. Due to the conflict in Ukraine, geopolitical uncertainty continues to plague the market. Inflation continues to break records in North America and around the world. Yet, Ethereum appears poised to enjoy one of its greatest years. Here are some reasons why.
ETH 2.0 increases staking prowess
One reason Ethereum has been so successful is that developers have just finished ETH 2.0. This blockchain combines Ethereum’s Proof-of-Work (PoW) and Proof-of-Stake (PoS) protocols.
This is a significant development as ETH 2.0 is expected to increase the yields of staking or rewards paid to miners. CoinDesk reports that ETH 2.0’s staking rewards are between 10% and 15%. Blockchain analytics firm IntoTheBlock recently estimated Ethereum stakes to be 7.9%. No wonder why the ETH to INR figures are soaring.
NFT adoption is on the rise
Another reason Ethereum’s price has been rising is that investors and institutions are adopting non-fungible tokens and decentralized finance (DeFi) protocols. These protocols are strongly built on the Ethereum blockchain.
NFT technology is a key component of the creator economy for both artists and corporate entities. CryptoSlam data shows that there have been over $570 million in NFT transactions over the recent past time. This represents a 46% increase over the previous months.
A band of NFTs performed on the Ellen DeGeneres show recently. To engage their audiences, corporate entities like Viacom and Fox Corporation use NFTs.
Stablecoins are Gaining Popularity
Stablecoins have also contributed to Ethereum’s recent bull market. These coins are tied to physical assets or commodities like oil, gold, and the U.S. Dollar. According to Bitcoinist, there has been a positive correlation between stablecoins’ rise and Ethereum.
Due to inflation and geopolitical instability, stablecoins like PAX Gold have outperformed the entire crypto market. According to CoinMarketCap trading data, PAX Gold’s value has increased by more than 6% over the past three months compared to Ethereum, losing 26%.
While all this may make you want to buy Ethereum in India, investors should research the risks and do their homework before investing their first dollar.
What Does the Future Hold for Ethereum?
The Future of Ethereum, according to Forbes, is that the cryptocurrency could reach $19842 by 2025 (which is approximately 14,88,150 Indian Rupees). This is a 400% increase over its current price. These numbers were predicted by Coinmama’s Chief Executive Sagibakshi and ConsenSys Head Economics Lex Sokolin. Personal Finance Comparison Site Finder also surveyed them.
Moreover, Ethereum’s long-awaited upgrades, initiated at the end of last year, are designed to increase its scale and lower its sky-high cost. This could allow it to reach new heights. It’s a well-known fact that Ethereum’s future was not always bright. The DAO hack, which sent $55 million worth of Ether to hackers in June 2016, was infamous. Ethereum was threatened by altcoins such as Ripple and Bitcoin Cash, which were both popular at the time. The current statistics show that Ethereum has regained its market share in the past four years.
Why is Ethereum’s Price Rise Significant for the Crypto Market?
Companies and tech giants use Ethereum to create customized blockchain models. The increased usage of Ethereum will lead to the creation of switching from the Proof-of-Work (PoW) to a new consensus algorithm in the future. These shortcomings will be addressed later. The question is: What exactly would this mean for the biggest competitor bitcoin?
Bitcoin advocates continue to agree that it is more decentralized than the Proof-of-Stake (PoS) algorithm. This makes it the crypto brand that investors feel more comfortable with. The crypto market has seen a stellar increase in BTC since the recent spike. However, some price movements in ETH indicate that investors believe the upgrade will take over BTC in the coming years. This could lead to a significant change in the global crypto market.
