The Ethereum nearly doubled in price during the same time period.
The world’s second most valuable cryptocurrency was boosted by a major upgrade to its underlying network, limiting the supply of the token and fuelled debate that Ethereum could eventually “flip” bitcoin.
The latest price surge means ether is up nearly 300 percent since the start of 2021, compared to a 40 percent hike for bitcoin. This has helped push Ethereum’s market cap from one-fifth of bitcoin’s to nearly half its value.
The entire crypto industry is quite excited about the latest Ethereum network upgrade. It will have a positive impact on investors as it is expected to bring in a lot of transparency in terms of transaction fees on the network, say experts
If you are a cryptocurrency investor, you would recently have received a message from your trading platform that it has disabled deposits and withdrawals for Ethereum (ETH). These facilities were restored by the exchanges late on Friday. The reason was that a major technical upgrade, called ‘The London Upgrade’ or ‘EIP -1559’, was being deployed on the Ethereum network.
The London upgrade and its need: It refers to a set of interconnected upgrades that will make Ethereum more scalable, more secure, and more sustainable.
“The Ethereum upgrade is popularly known as ‘London Hard Fork’. The major change we will see in this is how the transaction fee collected by the computers for processing the transaction is handled and distributed. This upgrade will mandate a part of the fee to be destroyed,” said Sathvik Vishwanath, co-founder, and chief executive officer, Unocoin.
In other words, only part of the actual fee charged to process a transaction would reach the person who is providing his processing power.
“Such destruction of cryptocurrency is possible by sending them to a null address and such payments can never be reversed or recovered or moved to another account. This is interesting because, over time, this would reduce the ether in circulation, which could push its price higher,” he added.
Impact on investors: According to experts, the upgrade is expected to boost the price of ether in the medium to long term, which will strengthen investor sentiment around the world’s second-biggest cryptocurrency.
“It will be exciting to see the bitcoin vs ether phase after the upgrade, as there are already some flipping conversations going on between ether and bitcoin in terms of market capitalization. There is a huge gap in the value between the two, but ether is the only strong competitor of bitcoin in the crypto world. However, it is important to note that Ethereum is already ahead of bitcoin on various other factors,” said Thakral.
While bitcoin’s most well-known use case is a store of value, Ethereum has several real-world applications such as decentralized finance (Defi) and smart contracts.
Ethereum Long (Buy)
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