28.11.2021

What will happen to the price of ETH after the transition of the Ethereum blockchain to protocol 2.0?

Analyst of the NewsBTC portal Reinaldo Marquez predicts 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, writes RBC Crypto.

In January 2021, Fundstrat Global Advisors analyst David Greider said that the cost of an altcoin could exceed $ 10 thousand.According to Greider, the upgrade of 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.

On August 19, the cost of Ethereum is $ 3 thousand. The rate 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?

Ethereum 2.0 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 the Proof-of-Stake (PoS) consensus – it will replace the Proof-of-Work (PoW) consensus, which is currently running the blockchain.

The main difference between PoS and PoW is that miners who generate computing power are not needed to maintain the PoS network. The operability of the blockchain is ensured by the stakers – 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 commissions for ETH transactions. Part of the commissions that miners previously received as rewards are now burned.

At 18:00 Moscow time on August 18, 60.6 thousand Ethereum were destroyed with a total value of $ 183.7 million, 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.

Growth factor ETH

The transition of Ethereum to protocol 2.0 will be a factor in the growth of the coin, says Viktor Pershikov, lead analyst at 8848 Invest. In his 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,” the analyst 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, according to the co-founder of the EXMO crypto exchange Ivan Petukhovsky.

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 his 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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