Bitcoin and cryptocurrencies have rallied this week after a subdued start to 2022, with the price of ethereum, the second-largest cryptocurrency after bitcoin, climbing almost 20%.
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The bitcoin price has climbed over $40,000 per bitcoin for the first time since early March but remains far below the near-$70,000 it reached late last year.
Ethereum has meanwhile shot over $3,000 as traders eye a looming upgrade that many think could turbocharge the coin.
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The ethereum price is braced for a major upgrade to the ethereum network that some think could mean … [+]
“Markets may realize in the next several months that ethereum is on course to become a global asset as adoption hits escape velocity, as the proof-of-stake transition transforms cash flows to real-income generation, and as environmental concerns ease,” Jamie Douglas Coutts, Bloomberg Intelligence senior market structure analyst, said in an emailed note.
“Ethereum has outperformed bitcoin over the last week and this move looks like it may continue,” Nicholas Cawley, strategist at DailyFX, said via email in reference to ethereum’s strong performance.
Ethereum is gearing up to a long-awaited migration from proof-of-work, the validation model used by bitcoin, to proof-of-stake—expected to help the network run more efficiently and use less electricity. Ethereum has also begun to become deflationary with more coins being “burnt” than are distributed to so-called miners who verify transactions on the blockchain. After the transition to proof-of-stake, expected within months, ethereum holders will instead “stake” their coins to confirm transactions.
“Enthusiasm has started to mount again as ethereum prepares for its long-awaited merge with Beacon chain, completing the protocol’s transition to an energy-efficient proof-of-stake consensus mechanism,” Will Hamilton, head of trading and research at Trovio Capital Management, said in emailed comments.
Hamilton expects ethereum’s upgrade to “radically change the supply dynamics of ethereum such that total emissions may become deflationary, likely acting as a catalyst for upside price momentum during the second half of 2022.”
While ethereum rivals such as Binance’s BNB, cardano, solana, avalanche and polkadot have proliferated, each seeing huge price gains, ethereum remains by far the most popular smart contract blockchain.
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The ethereum price has climbed almost 80% since this time last year. The bitcoin price is down 20% … [+]
“The emergence of a highly competitive ecosystem of alternative layer one blockchains since 2020 hasn’t undermined the appeal of the ethereum network to the developer community, the lifeblood of any platform or project,” wrote Douglas Coutts, pointing to DefiLlama data that shows ethereum has 564 protocols, 40% above its nearest rival.
“In terms of scale, ethereum is 2.8x larger than the second-biggest platform, polkadot, and maintains the largest ecosystem of tools, apps and protocols.”
While BNB, cardano, solana, avalanche and polkadot grew faster in 2021, ethereum continued to add developers, growing 42%, compared to bitcoin’s 9%, and attracting one of every five new developers of web3—a term for the crypto and blockchain-based internet.
“Underscoring the depth of mindshare, solana, the eighth largest cryptocurrency, has 900 developers, which is less than the number that entered the ethereum ecosystem in the past year,” Douglas Coutts added.
Source: https://www.forbes.com/sites/billybambrough/2022/03/22/escape-velocity-huge-ethereum-upgrade-could-see-its-price-leave-bitcoin-bnb-xrp-cardano-solana-luna-and-avalanche-in-the-dust/