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At what price can Ethereum be delivered with Update 2.0?

July 3, 2020

As the news was announced that the Blockchain Ethereum network would change the algorithm in its consensus mechanism to validate transactions, Many analysts have disturbed Ethereum’s final price after it was updated.

Although it’s too early to judge, It’s important to know the basics that could give us a more objective and clear idea of ​​the price of altcoin most importantly on the market after the update to Ethereum 2.0.

It is worth noting that There is no way to predict the coming events in any aspect of our lives, and less so when it comes to cryptocurrencies. However, there are compelling reasons to believe that Ethereum’s price could be better than it currently is if it averages $ 220.

Ethereum 2.0: Sharding + PoS

At what price can Ethereum be delivered with Update 2.0?
At what price can Ethereum be delivered with Update 2.0?

We need to know the basics of this improvement first and then have a more solid weight if we can do cryptocurrency analysis. And therefor It is important to understand what the Ethereum 2.0 update is about.

Basically, this update is a new network that uses sharding as a scaling solution. Sharding or fragmentation is a technology that allows the Ethereum network to scale faster than it currently does, with an average of 11 TPS “transactions per second”.

To achieve this, the network will change its algorithm by moving from a proof of work -PoW-, which is quite expensive in terms of energy consumption and mining equipment, to a consensus mechanism based on proof of participation or PoS based.

The update is called Casper and is the great promise of Ethereum 2.0, which Vitalik Buterin himself has defined as the world’s computer. “

With PoS and sharding as the technological foundation for scaling, Ethereum is likely to become a major competition for fiat money. for the entire decentralized financial ecosystem that forms the backbone of the Altcoin network.

It is worth noting that Ethereum’s scaling problems have been the subject of much discussion since their inception after the Cryptokitties event, and many related solutions can be found, such as: B. Plasma and ZK rollups, which make it possible to process and package a large number of transactions outside of the chain, which improves their current performance.

These solutions were part of the improvements Buterin itself promoted in response to the community, due to the narrative about the Ethereum 2.0 launch delay that was originally planned for early 2020 but has been postponed several times.

With or without delay, the truth is that the first Genesis block was created last May by Prysmatic Labs and Sigma Prime and since then, the initial Schlesi test network has had a large number of validators to find bugs and apply the appropriate enhancements that allow the final client environment to run safely for the user.

At the moment it is known as important data that blocks must be executed when staking with Ethereum 32 ETH should be able to participate as a validator of network transactions, which corresponds to a return of around 14 percentAccording to the ETH 2 calculator, which was published on a trial basis by EthereumPrice.org.

Why is the ETH 2.0 update important?

The backbone of the new financial order trumpeting cryptocurrencies is undoubtedly Ethereum. And after the coronavirus pandemic, with the recent surge in contactless payments and the recession on the doorstep in major economies around the world, de-fi appears to have a new dynamic, which is reflected in the latest key figures for June.

To continue to attract new investors and avoid current congestion problems, high fees, and security vulnerabilities in Ethereum’s blockchain network, The update is undoubtedly a key factor for the further increase in acceptance.

There is no doubt that the world has changed after the corona virus entered our lives. From entertainment such as online sports, games, streaming to health and work, they will undoubtedly be largely digital, and blockchain plays a fundamental role in this.

Ethereum is without a doubt the great ecosystem that includes all of these options, with more than 4,600 decentralized applications “dApps” and a daily volume of just over $ 750 million. that still allows him to be a leader in many segments of the “new reality”.

Also in the financial sector, according to DeFi Pulse, more than 3.1 million ETH have been invested in DeFi – around $ 690 million – as graphed by IOSG Ventures in its map of the ecosystem of decentralized financing through Ethereum.

To effectively manage all requests from users who continue to use their applications, The platform must be scaled, and its dominance in crypto games and decentralized funding in general depends on how quickly ETH 2.0 is implemented.

Metrics that would trigger a bullish scenario

According to Glassnode, an important metric is all about the Ethereum ecosystem the increase in ETH addresses with more than 74 million ETH addresses and an average rate of 100,000 new addresses per day.

According to the cryptocurrency analysis company, the direction that ETH maintains has increased by more than 350% since altcoin peaked in 2018.

With 74 million ETH addresses, there is a clear signal to the market from investors: they will not sell to rely on the new participation system from Ethereum 2.0.

The accumulation is also seen as a diversification of the Ethereum market, which prevents centralization by whales and a stronger entry of new investors into the internal market due to the decentralized financing.

Another metric that points to the optimistic scenario above is the increase in the gas fee of the Ethereum network. According to Etherscan, daily activity on the Ethereum blockchain is increasing dramatically, based on the increase in daily gas consumption in the network.

At the end of June this figure reached almost 74,000 million, an increase of + 35% compared to the same period in the previous year.

This leads to increased use of decentralized applications in the second most important blockchain on the market after Bitcoin.

And based on the deployment and use of the Ethereum network through decentralized applications, ERC-20 token transfers are another strong indication of how robust and important Ethereum is for other blockchain platforms as well.

According to Etherscan, the daily transfer of these tokens was approximately 39,000 on July 2, 2017. Two years later, the increase was rapid and sustainable, averaging over half a million ERC-20 token transfers. via the Ethereum blockchain.

In summary, we can highlight Ethereum’s basic support to think about an improvement in future pricing after the successful launch of the update:

  • The price of the asset has not fallen below $ 0.42 since its launch in 2015. Although its ATH is still further away than many expect, its ROI remains among the best on the market.

  • Ethereum represents more than 90 percent of DeFi, the new decentralized financial system that is said to dominate on a traditional basis.

  • Access to institutional investors with the first physically processed US futures contract for Ethereum through Erisx Clearing.

  • Network usage increased by more than 35% last year.

  • + 350% more new addresses from your ATH.

  • + 1400% more use of ERC-20 tokens by third parties.

  • Mastery of 82% of the total transaction volume in dApps in the second quarter of 2020, according to dappradar.

  • Market capitalization growth of $ 4.5 billion in the second quarter of 2020 compared to the first quarter of 2020.

  • + 10% increase in ETH prices in the first quarter of 2020 compared to the same period in the previous year.

Ethereum price current situation

At the time of writing, the price of Ethereum is $ 225.18 according to the Cointelegraph price indicator

From a futuristic point of view The 1W chart in Binance for the ETH USD pair signals a harmonious pattern that the cryptocurrency has had since registering its ATH in January 2018.

According to the graphic The price of ether could enter a new recession in the second half of Julyto create a third higher low that will allow him to think about a future beyond his immediate resistance of $ 290, the door to the long-awaited $ 300 per coin.

The above is consistent with Skew’s short-term data on ETH options that favor a 4 to 1 put options ratio – bearishly.

If the weekly candle breaks below the projected pennant, we may be able to think of an Elliot correction wave for the coming periods before the cryptocurrency picks up with the expectation that ETH 2.0 will finally be released or not.

It is even more important If the update doesn’t live up to expectations or, in the worst case, remains behind for Altcoin, we’ll be thinking about a bearish forecast for a long time before de-fi and blockchain games demand price increases from investors.

With a key range of 23.6% Fibonacci over $ 400, Ethereum still has a long way to go before it leaves its depressed zone and thinks of new bullish air.

With the widespread acceptance of the ecosystem and a projected improvement of the entire blockchain ecosystem in general It is conceivable that a higher average price than the current one can occur within a period of two to three years. when everything works as planned by the Ethereum development team.

The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and trade movement involves risks. You have to do your own research when making a decision.