- Shark Tank’s co-host Mr Wonderful has praised Ethereum as ultra-sound money after it implemented the EIP-1559 upgrade last week.
- ETH held by CEXs falls to a three-year low with a rising in popularity for DeFi in the much-awaited ETH 2.0.
Best known as “Mr. Wonderful” on the reality competition series “Shark Tank”, Kevin O’Leary has made a turnaround on cryptocurrencies, especially Ethereum, this year. The Canadian investor has now expressed a positive outlook for Ethereum (ETH) following its EIP-1559 upgrade.
“If Bitcoin is sound money because of the 21-million-coin supply ceiling, Ethereum enjoy the same benefit now…It’s ultra-sound money because there’s no supply floor,” O’Leary said.
Notably, the EIP-1559 was implemented last Thursday during the Ethereum London hard fork. The upgrade made the net cash flow positive and created deflationary pressure on ETH’s price. Particularly, instead of transaction fees going back to miners, they now go back to the network where they are burned.
Since Thursday, over 18,600 ETH ($59 million) have been burned. Subsequently, the price of ETH has risen by 21 percent in seven days. At writing time, ETH was trading at $3,146, 6.3 percent up in a day according to our data.
Additionally, the shark compared the development to business profitability where the income surpasses the expenses. He equated burning profits to giving shareholders a stock dividend.
Effects of Ethereum EIP-1559
In the past, O’Leary like other market leaders was highly skeptical of digital assets. He has been recorded calling Bitcoin “hot garbage.” His opinion, however, changed as Bitcoin’s market cap swelled in the second half of 2020 and peaked in early 2021. In March, he even shifted to an investment strategy that involves placing 3 percent into Bitcoin and Ethereum.
O’Leary’s co-host and Dallas Mavericks owner Mark Cuban also expressed similar views. Ethereum already has utility as it is used by most developer programs, NFTs, and smart contracts on the network. EIP-1559 now reinforces it “specifically as a store of value,” Cuban said.
Nevertheless, some players have pointed out that the effects of the upgrade are still in test mode. For instance, Josh Cincinnati, former Zcash Executive director tweeted,
I think EIP-1559 is quite cool but anyone making predictions about ETH supply thanks to EIP-1559 is going to be proven wrong – in any direction.
Before the upgrade, Taylor Monahan, CEO of MyCrypto commented that there was “downward pressure” on the market. This is due to the uncertainty that the upgrade brought with it. The pressure, she said, would be alleviated with the success of the hard fork. Pressure may, however, return as people begin to channel their minds into the upgrade to ETH 2.0.
Ether held in CEXs drops
In other developments, Ether held by centralized exchanges (CEXs) has dropped to 9.4 percent of the current total supply. This is the lowest level seen since 2018, according to OKLink data. Eddie Wang, a senior researcher at OKLink attributed the drop to the increased popularity of DeFi over centralized platforms. Additionally, the much-anticipated launch of Ethereum 2.0 might be another factor, according to Wang. More than 6.5 million Ether is locked in ETH 2.0 deposit contract addresses, Dune Analytics shows.