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ETH might gain back its value with Ethereum 2.0 update a.k.a ‘next ETH’
The global financial ecosystem is under tremendous stress ever since the Russia-Ukraine war broke out. Every financial instrument has seen a decline and cryptocurrencies are no exception. Bitcoin and Ethereum, the most popular cryptocurrencies have significantly lost their market value. ETH traded at US$2,500 for two weeks straight, which was having a major resistance level a couple of months back. According to experts, it is the best time to buy Ethereum as they predict a good time for Ethereum.
Ethereum is not just a cryptocurrency but an important node run by ETH tokens and runs the entire blockchain ecosystem. It is a kind of computer which runs decentralized applications. Though Bitcoin is a forerunner to Ethereum in value as well as popularity, Ethereum is a source of advanced features like NFTs, smart contracts, DApps, etc. Precisely, ETH is the close competitor of Bitcoin since its debut in 2015. It is a dependable currency that has both intrinsic and industrial value. It has also been able to overtake Bitcoin quite a few times earlier. Because of global disturbances, it’s been losing value. Last November, it was trading at a high and with constant fluctuations, its value fell down to stabilize at US$25,000. However, experts suggest a bright future for ETH in the year 2022, with the upcoming Ethereum 2.0.
Why ETH is not doing so well now?
Ethereum is the second-largest cryptocurrency by market capitalization and the epicenter to smart contracts, DeFi, DApps, etc. Over the past seven years since its inception, ETH has faced many challenges. Although it emerged as a major competitor for Bitcoin initially with advanced features and a better working system, Ethereum competitors like Solana and Polkadot are more capable now. Over time, cryptocurrency investors who hailed the feature seem to have realized the downsides. Developers have noted some key advantages like the high gas fees, slow transaction speed, and hard-to-code nature of ETH.
Who is the biggest benefiter of Ethereum’s loss? Solana and Polkadot have emerged as the greatest winners of ETH’s loss. The disadvantages in the Ethereum ecosystem have exposed developers to look for ‘next ETH’. As a result, they embraced Solana and Polkadot, the direct competitors of Ethereum, as a substitute. Besides, these altcoins are specifically built to address the challenges of Ethereum, making it extremely competitive.
How can Ethereum 2.0 help ETH regain its lost glory?
As mentioned above, developers have become familiar with the vulnerabilities of Ethereum, making them choose other networks over it. However, the targeted shift from proof-of-work to proof-of-stake model is expected to make many positive changes. For example, the upgrade is aimed to address the high transaction fees, increase coins burned and improve congestion. The upgraded features in Ethereum 2.0 are expected to increase the demand and lift activity drastically, which will eventually trigger its price.
Experts also say that the move to proof-of-stake will have a positive impact on the cryptocurrency’s price and trigger more people to buy Ethereum. The biggest drawback of ETH right now is its gas fees and if the network is willing to reduce it, then investors won’t have a problem availing themselves of ETH services.
Can the Russia-Ukraine war continue to influence Ethereum’s Price?
It is not just Ethereum that is facing the storm from the Russia-Ukraine war. Generally, assets, stocks, tokens, etc are getting the blow on their face from the geopolitical crisis. This week, Ethereum’s price dropped below US$2,500 as Russia’s invasion of Ukraine has contributed to heightened volatility. Although ETH is trying to make a comeback, it is strongly being pushed against at US$3,000. But the geopolitical impact on cryptocurrencies is not a usual thing. Even if it does, experts say that time will bring digital tokens’ value back on track.