Opinion: Ether is a more democratic cryptocurrency, it is still available to small investors

The entire year of 2021 has been generally positive for the altcoin market. And Ether strengthened its position as the second coin on the market. Since the beginning of 2021, the coin has given its investors +667.4% growth. To understand what the future of Ether will be, it is worth considering the key events of the network in 2021.

At the beginning of 2021, ETH futures were launched on the Chicago Mercantile Exchange (CME), and this event had a positive impact on the entire cryptocurrency market. In fact, at that moment, Ether confirmed its status as an influential, but still second, cryptocurrency in the world. Further, on April 15, the “Berlin” hard fork took place on the network. In June and July, the developers continued test launches of the Ropsten, Goerli, Rinkbay, EIP1559 networks. 

The second key event occurred on August 5, 2021 - the successful hardfork “London” (London), the second this year, was launched, which led to a corrective growth of Ether, which is still ongoing. The coin has already surpassed the $3,200 mark.

The main changes in the Ethereum network that occurred due to testing and the fork on August 5, 2021 can be considered predictability in the calculation of commissions, faster network transactions, as well as the introduction of a mechanism for burning ETH during transactions.

PointPay CEO Andrey Svyatov believes:

Now the commission on the Ethereum network has decreased three times and averages $16, which is certainly more interesting for users than $70 in April-May 2021. But opinions among miners regarding the profitability of Ether mining differ. In the future, by the end of the year, the profitability of ETH mining may decrease; moreover, with the transition to version 2.0, mining will be completely replaced by a more “ecological” model that does not depend on the capacity of the equipment - staking. The transition to PoS will make Ether faster and more environmentally friendly by completely eliminating mining and will continue Ethereum's course towards creating a universal platform for developers and for writing decentralized applications. It is the network’s ability to become a worldwide platform for writing applications free from any censorship that can make ETH the number one cryptocurrency in the future. Of course, unless more technically convenient competitors appear on the market.

Part of the new burning mechanism, as well as the growth of BTC, led to a strong positive correction for ETH in July and August 2021. At the moment, according to the ultrasound.money service, more than 21.2 thousand ethers have been burned in the Ethereum network since August 5, 2021, when the London fork occurred, which at the time of writing (August 10) is equivalent to 66 million US dollars.. The daily burn volume is approximately 2150 ETH, and the volume continues to grow.

The following platforms produce the largest burn volumes. The first – OpenSea, a platform for the purchase and sale of NFT tokens (by the way, the growth of the NFT market showed a maximum in the third quarter of this year) – gives about 30%. The second most important is the Uniswap DEX exchange: 18% of all burns. And the third is AX Infinity, a cryptocurrency NFT game. By the end of the year, more than $1.5 billion worth of ETH will be burned on the network, and this could be a great impetus for the growth of this cryptocurrency. 

Another trend that speaks in favor of Ether is the increase in daily trading volume, which is currently comparable to the trading volume of Bitcoin, and sometimes even exceeds it on some exchanges, and today exceeds 28 billion US dollars per day. 

Andrey Svyatov added:

Most likely, 2021–2022 will be marked by the liberation of altcoins from their strict peg to BTC. Altcoins have their own economic value, many of them are conceived as unique projects with their own market meaning, but all of them until now have been tightly tied to the behavior of Bitcoin in the market.

He noted that from 2018 to 2021, the price of ETH was almost completely correlated with the price of BTC. Now, in the 2nd-3rd quarters, the desire of the second altcoin by capitalization to become more independent from Bitcoin is increasingly felt.

PointPay analysts believe that after the complete transition to Ethereum 2.0, which is expected at the end of 2021, the price of the cryptocurrency may reach a minimum of $5,000, and over a two-year horizon – $10,000. 

However, of course, there are still many factors in the market that can change the expected trend.

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