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Ethereum hits $2,350 amid excitement over its new hardfork

The implementation of the EIP-1559 protocol – which changes the base rate structure, making the Ethereum blockchain deflationary – is creating a lot of excitement among investors.

On Sunday, July 4th, the world’s second-largest cryptocurrency Ethereum (ETH) surpassed $2,350 in a strong northward move. Ethereum (ETH) has shown an upward momentum over the past week, with investor excitement surrounding the London hardfork.

However, after hitting its intraday high of $2,382 on Sunday, Ethereum saw a small pullback. To date, ETH is still trading up 3.41% at a price of $2,272 with a market capitalization of $264 billion.

Ethereum developers are already preparing for the hardfork London update. Two weeks ago they implemented the London test network while burning over 88,000 ETH coins. This controversial hardfork involves the implementation of the EIP-1559 gas flaring protocol.

Ethereum London hardfork

The implementation of EIP-1559 significantly changes the Ethereum gas rate structure by introducing the “base rate” model. It features a dynamic fee structure while implementing procedural and periodic fee burning. Thus, it will make ETH a deflationary asset for the first time in history.

The implementation of EIP-1559 will considerably reduce the problem of high gas fees for ETH investors. While this is certainly a welcome move for all ETH investors, miners have opposed it. Many analysts believe that fork London will have a positive impact on the price of ETH.

The “scarcity” feature will also reduce the number of ETH coins in circulation, leading to upward price swings. In addition, investors are likely to increase their exposure to Ethereum.

According to data from the network, Ethereum’s active addresses surpassed those of Bitcoin for the first time in history last week. The world’s second largest blockchain network registered over 750,000 active addresses last week. This is a crucial milestone that shows the growing acceptance of Ethereum among its peers.

Institutional acceptance of Ethereum

Etheruem (ETH) is finding increasing acceptance among institutional actors today. Financial players have been working to bring Ethereum derivative products to market. Last week, SkyBridge Capital founder Anthony Scaramucci announced that they will soon be planning their Ethereum fund on the market.

In addition, Scaramucci also announced that his company will also work to bring the ETF Ethereum to market. This is part of SkyBridge’s efforts to delve into alternative asset classes beyond just Bitcoin.

On the other hand, the Ethereum 2.0 implementation will see a major transition to the Proof-of-Staking (PoS) model. There are already over 5 million ETH coins stacked with ETH 2.0 deposit contracts worth over $11 billion. According to analysts at JPMorgan, implementing Ethereum 2.0 could create a $40 billion stack industry by 2025.

Source: Coinspeaker

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