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Analysts predict a massive spike in Ethereum post the merge, believing ETH is undervalued.
There is no doubt that Ethereum is still the most powerful crypto project in the market. Despite the Ethereum chain’s limitations, the unmatched feature of the Ethereum blockchain, such as security, still makes Ethereum one of the most popular blockchains. The powerful Ethereum smart contract functionalities have enabled thousands of large crypto projects to run on it. There are over 2k large Ethereum wallets, including Shiba Inu, Polygon, and many others. There are also thousands of projects, including thousands of dApps on the Ethereum chain.
The major limitations affecting the Ethereum project are the low scalability and the high gas fee. But the Ethereum team is addressing these issues with the mainnet upgrades, which will make Ethereum a faster chain and lower the gas fee. Therefore, there are a lot of developments going on that will make Ethereum remain the biggest crypto project in the industry. Crypto analysts predict that the Ethereum price shall increase more than 300% by the time these upgrades are complete.
The price of ether, along with bitcoin, has been extremely volatile over the last few months due to a broader market retreat from risky assets. The crypto market crashed in June after the Federal Reserve aggressively raised interest rates, crypto companies announced layoffs and froze withdrawals, and the industry continued to face regulatory challenges.
Ethereum has also been underperforming bitcoin so far in 2022, which experts say could be due to building anticipation for the network’s transition from proof-of-work to proof-of-stake. Bitcoin is down about 55% year-to-date, while ether lost more than 70%, according to NextAdvisor data.
There are a few reasons why Ethereum’s price will keep on increasing shortly
Currently, Ethereum is used by tech giants and corporations to develop customized blockchain models. In the coming years, the increased use of Ethereum will lead the creators to switch from proof-of-work to a new consensus algorithm. The next version will absolve these shortcomings.
The Sepoliatestnet merge was essential to ensure that the technology employed is error-free before the final merge and transition to the proof of stake consensus mechanism takes place. The changeover of the Ethereum blockchain from proof-of-work to proof-of-stake would take place gradually.
Besides this, NFTs are currently flourishing. NFTs can act as sports trading cards or contain video clips of historic sporting moments. Either way, they have the ownership, copyright, and authorization information coded into the token and stored in the blockchain network. Hence, several crypto enthusiasts are using and investing in NFTs, which might be impacting ether’s value because a sizable portion of the NFT market is hosted on the Ethereum network. Whenever investor buys or sells NFTs, they have to use the ETH network.
A group of experts believes that Ethereum and most major cryptocurrencies in the market follow the price of bitcoin as it moves up or down. But over the past year, bitcoin has witnessed significant gains, while Ethereumjust lagged. Another group of experts and market analysts believe that ETH is just catching up with the gains of bitcoin.
One of the other factors of the price surge is the launch of Ethereum 2.0. This upgrade addresses major concerns impacting the traditional version of the crypto. This version will reduce the transaction fees, which is especially useful in Defi trading, where each transaction can end up costing thousands of US dollars.
Proponents and analysts await the Merge, a key milestone in the Ethereum network’s growth. The transition to Proof-of-Stake (PoS) is the final step in mass adoption and the Triple Halving narrative. In less than three months, the upgrade could be activated.
The final upgrade would burn hundreds of millions worth of ETH, reducing the circulating supply and driving the altcoin price higher.
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