Ethereum, the world’s second-largest cryptocurrency, recently surpassed the $1,900 threshold, but experienced a drop shortly after. Despite the dip, Ethereum saw a 4% gain for the week. A major factor in Ethereum’s recent growth and future potential is the highly anticipated Ethereum 2.0 upgrade set for April 12.
The Ethereum 2.0 upgrade will introduce a new feature called Proof-of-Stake (PoS) consensus algorithm. This changeover will move away from the previous Proof-of-Work (PoW) algorithm and provide users the opportunity to stake, or hold, their Ether in order to validate transactions, maintain network security, and earn rewards.
This long-awaited upgrade from Ethereum will drive institutional investment, as staking enables the token holders to earn interest and be rewarded for their contribution to network security. With Ethereum 2.0, Ethereum will become a more efficient and eco-friendly system while improving its capacity in transactions per second.
As expected, this has created much speculation surrounding its impact on Ethereum’s price. However, analysts suggest that its influence cannot be definitively predicted yet, as the combination of many other factors can affect its price, such as external market conditions and the competitive landscape.
At the time of writing, Ether trades around $1,800. Some analysts believe that if it breaks above $1,900, it could create a new bull run. Although, others suggest the beginning of a market down cycle, citing a lack of evidence supporting a bullish trend.
Meanwhile, on Thursday, liquid staking tokens such as Lido DAO (LDO) and Rocket Pool (RPL) experienced a slight dip. However, a recent report from CoinShares suggests that staking on cryptocurrency networks is becoming an increasingly popular way to earn rewards from holding digital assets. In the broader market, Bitcoin (BTC) was trading at around $28,100, marking a slight 0.1% decrease as of recent.
In summary, the Ethereum 2.0 upgrade may cause shifts in the crypto market in the coming weeks as investors respond to new staking capabilities and the potential for Ethereum’s increased scalability. Despite its recent drop, Ethereum’s prospects remain bright, but only time will tell how it will affect the larger crypto market.
However, it is clear that the Ethereum 2.0 upgrade will have a major impact on the future of cryptocurrency and blockchain technology. With an increase in institutional demand for digital assets and staking becoming more accessible, Ether could be poised to enter its next bull run.