Experts explained how the deployment of protocol 2.0 will affect the quotes of the largest altcoin by capitalization and to what level the digital coin can strengthen in the long term.
Analyst of the NewsBTC portal Reinaldo Marquez predicted that in the long term, the price of Ethereum will grow from the current $ 3 thousand to $ 20-40 thousand. According to Marquez, the price will rise as the altcoin is updated to protocol 2.0.
In January 2021, Fundstrat Global Advisors analyst David Greider said that the cost of an altcoin could exceed $ 10 thousand.
According to Greider, upgrading Ethereum to protocol 2.0 will allow the blockchain to approach such payment systems as Mastercard and Visa in terms of transaction volume.
Last year, Amsterdam Stock Exchange analyst Michael van de Poppe also made a forecast for Ethereum to rise in price. According to the analyst, the digital coin has a growth potential of up to $ 10,000.
You remember how $BTC pumped from 20k to 40k in just 3 weeks once it broke its ATH?$ETH will pump from 1.4k to 3k in less than 2 weeks once its ATH is broken imo.
In addition, the whole alt market will be the double digit gains every day.
— Simon Dedic (@scoinaldo) January 14, 2021
On August 18, the cost of Ethereum is $ 3 thousand. The course of a digital coin in mid-August for the first time since mid-May exceeded $ 3.3 thousand. On May 12, the price of Ethereum reached a historical maximum of $ 4.3 thousand.
What is Ethereum 2.0?
The Ethereum 2.0 protocol will allow the original blockchain to scale and make it more user-friendly.
The main feature of the update is the network’s transition to Proof-of-Stake (PoS) consensus – it will replace the Proof-of-Work (PoW) consensus, which the blockchain is currently running on.
The main difference between PoS and PoW is that miners are not needed to maintain the operation of the PoS network, who generate computing power.
health of the blockchain is ensured by the holders of digital coins and are rewarded for this.
On August 5, the London update took place on the Ethereum network , which completely changed the mechanism for calculating transaction fees. Some of the commissions that miners previously received as a reward are now burned.
On August 18, 60.6 thousand Ethereum with a total value of $ 183.7 million were destroyed, according to the ultrasound.money service, which tracks the burning of coins on the altcoin network. The average burn rate per minute is 3.22 Ethereum.
Burning is the destruction of a certain number of tokens to reduce their number in circulation.
This method is used to combat inflation and increase the value of cryptocurrency .
All coin burning operations are recorded on the blockchain as a transaction, so anyone can verify that the coins have been destroyed.
Growth factor
The transition of Ethereum to protocol 2.0 will be a factor in the growth of the coin, according to leading analyst at 8848 Invest Viktor Pershikov.
In Pershikov opinion, the technical improvement of the project, combined with the continuing significant demand from dApps developers, as well as the integration of the PoS algorithm, can become a serious basis for the demand for the asset from not so much retail as institutional participants.
“The path that Ethereum developers are taking and the willingness of users and network participants to move to version 2.0 may shift the attention of institutions from the regulatory toxic bitcoin to Ethereum, which is at the heart of many blockchain projects in the industry,” Pershikov said.
In the next couple of years, the market capitalization of Ethereum may increase 3-5 times, Pershikov predicted. On August 18, the altcoin has a market valuation of $ 359 billion, according to CoinGecko.
Ethereum will be able to surpass Bitcoin in capitalization only if the main cryptocurrency remains at the level of $ 50 thousand, while altcoin will rise in price to $ 10 thousand, says Ivan Petukhovsky, co-founder of the EXMO crypto exchange.
During the ICO (initial placement of tokens), Ethereum cost about $ 0.3 and since then its price has increased 10 thousand times, recalled the co-founder of BitCluster Sergey Arestov.
In Arestov opinion, nothing prevents altcoin from continuing its growth and rising in price by another 10 thousand times.
“Bitcoin is an investment and payment instrument. Ethereum is an ecosystem that can be called the Internet of the cryptocurrency world, ”says Arestov.
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