Ethereum prices are rising again today, pushing the broader crypto market higher once again, and this appears to be a trend that has occurred before.
Ethereum is the top performing digital asset at the moment, gaining over 14% on the day and beating all other assets in the top twenty by market capitalization. ETH price reached an all-time high of $1,667 on the morning of July 27, before retreating slightly at press time.
The recent crypto rally, which hit a total cap of $200 billion in two weeks, is driven by momentum for Ethereum and its long-awaited transition to proof-of-stake.
Moreover, the ETH/BTC ratio is also moving towards its all-time high as the asset continues to perform.
bullock driver
David Hoffman, Ethereum advocate and founder of Bankless, proposes the notion that the crypto has been a bull market. powered by ethereum,
In 2017, the ETH funded ICO (initial coin offering) boom propelled the markets higher. In 2021, the DeFi (decentralized finance) and NFT (fungible tokens) booms were also crucial to the market momentum. They also had Ethereum as their foundation, as did many stablecoins which also changed the narrative away from BTC in the previous cycle.
Hoffman predicted that the next bull run will also be led by Ethereum and early signs are showing just that. His reasoning behind this premise is that the next bull market will be based on fees.
“Bitcoin’s volatile security budget isn’t really going to be a problem in like 20 years… as $ETH goes through a 20-year bull market and helps support the BTC price along the way,” he commented.
The counterargument is that Ethereum fees make it impossible for most non-whale retail traders to access the network. Furthermore, the merge will not solve this because changing the consensus to proof-of-stake does not reduce gas fees.
Ethereum has a long way to go
This will only happen if the network can scale with sharding and side-chains, and it is unlikely to happen until 2023 at the earliest.
Ethereum has a long way to go before it is ready for public adoption. Even co-founder Vitalik Buterin recently said that the system will be only 55% complete after the merge.
The reduction in issuance and collateral rewards is likely to be a big factor for Ethereum as investors seek long-term gains from decentralized deflationary digital assets.