In the second half of July, the largest altcoin in terms of capitalization rose in price by more than a third. Will the digital coin continue its explosive growth following the London update scheduled for August 5?
Over the past two weeks, Ethereum has risen in price by 37%. Altcoin capitalization exceeded $ 291 billion. At 13:20 on August 3, the digital coin is trading at $ 2.49 thousand.
Experts assessed the prospects for Ethereum and explained whether the altcoin rate could rise in the near future.
London renewal prospects
On August 5, at block 12,965,000, the Ethereum network called London will be updated as part of the cryptocurrency transition to protocol 2.0.
This solution will scale the original blockchain and make it more user-friendly.
The main feature of Ethereum 2.0 is the network’s transition to Proof-of-Stake (PoS) consensus, which does not involve mining.
Now, altcoin, like bitcoin, works on a Proof of Work (Pow) consensus. Also, the London update will add a token burn mechanism to the Ethereum blockchain.
Burning tokens is the destruction of a certain number of them to reduce their emission.
This method is used to combat inflation and increase the value of cryptocurrencies.
All token burn operations are recorded on the blockchain as a transaction.
Therefore, anyone can verify that the coins have been destroyed.
The London update will not only make Ethereum a deflationary asset, but will also reduce fees to miners, and will also help unload the network, says Artem Deev, head of the analytical department at AMarkets.
Until the update, altcoin growth was limited by low bandwidth and increased transaction fees, he said.
How the market might react?
The release of the London update will have a positive effect on the cost of Ethereum in the long term, the head of the data analysis department of CEX.IO Broker Yuri Mazur is sure.
In his opinion, in August, altcoin quotes may be under pressure in the short term.
“In financial markets, the rule“ buy on expectations, sell on news ”often works, so it is likely that after the Ethereum network is updated, the rate of the digital coin will correct,” Mazur explained.
The head of the analytical department of AMarkets is of the same opinion. He predicted that in the short term, the altcoin will move to a correction, as a result of which its value will drop to the level of $ 2.4 thousand.
After that, the coin will start testing the mark of $ 2.8 thousand, Deev said.
“Ethereum’s growth potential has not yet been exhausted. Against the background of the decline in the price of bitcoin, more and more investors are investing in altcoin in the hope of profit, “the analyst added.
When to expect a rise in price to $ 3 thousand?
Ethereum will be able to reach the $ 3 thousand mark already this month with a 60% probability, Mazur predicted.
In his opinion, such growth from altcoin should be expected only if there are no negative factors in the market, for example, new statements by central banks to tighten regulation of cryptocurrencies.
“We adhere to the positive outlook for the altcoin and believe that in August the ETH / USD pair will be able to gain a foothold near the $ 3 thousand mark,” added Mazur.
In the coming months, Ethereum can rise in price to $ 3 thousand only if the potential laid down in the London update is realized, Deev argues.
According to his forecast, this will happen before the end of September this year.
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