- Ethereum is known to follow Bitcoin’s price patterns and a bull run for Bitcoin could mean an upswing for Ethereum.
- The increase in activity on the Ethereum network due to more interest in NFTs, dApps and DEXs could eventually propel it to greater heights.
The crypto market seems to be on an upswing, largely due to Bitcoin’s return to previous heights. Loosely mimicking Bitcoin’s trajectory since late September, the world’s second-largest cryptocurrency and number one altcoin, ETH is up to $3800 today. Experts are of the view that the Ethereum network is about to see exponential growth. This seems plausible looking at the increase in Ethereum case uses and the demand for Ethereum-based products.
The past few months have brought an increase in Layer-2 protocols which have brought about increased demand for Ethereum block space.
Frank Holmes, CEO and CIO of US Global Investors and Executive Chairman of the HIVE Blockchain expressed his views on Ethereum. He points out the relationship between BTC and ETH prices and likens it to that of gold and silver.
When gold goes to a 50-day moving average, and it goes up 15-20 percent, silver all of a sudden surges 30 percent. Ethereum is to Bitcoin — is like silver is to gold. Bitcoin makes the big charge, then all of a sudden Ethereum explodes to the upside. That’s the sweet spot for us […] It is a smart contract — Ethereum has many more uses than Bitcoin does, the same way silver does — 20 percent of demand for silver is for solar energy. It has a green footprint, viruses can’t live on silver, it has many medical uses, etc., The same thing with Ethereum, it is used for DeFi, for NFT’S. It’s a much more important backbone for growth in blockchain.
The general mood around Bitcoin is that it is headed for a major bull-run by the end of the year. In fact, crypto-Twitter is already calling this month “Uptober”. If this relationship between the top two currencies is anything to go by, then ETH is also headed for a major break.
Another reason to believe ETH is about to explode is the renewed interest in decentralised finance (DeFi) and non-fungible tokens. A large portion of DeFi and NFT products and services are based on the Ethereum network. Unlike the Bitcoin network, whose activity has decreased tremendously, the Etherum network has seen a great increase in activity. The link between Ethereum price and the increase in uses and applications like NFTs, DeFi platforms decentralized applications (dApps) and smart contracts is undoubtable.
Ultimately, the basic principle of “supply and demand” could be the final and deciding factor in ETH prices. Ethereum is set to move from the proof-of-work protocol to proof-stake by next year. This means that miners will not mine in an energy-intensive way anymore.
Staking will be used to ensure the safety of the blockchain. Many are of the view that this is what will increase ETH’s value. They believe that the idea of steady returns guaranteed by staking and the relatively quick payback period will maintain the hype around the altcoin and this will translate into high demand.