Experts believe Ethereum’s upgrades can make it a long-term store of value like Bitcoin

Posted: 5 July 2021 4:00 am
ETH_price_07-06 - 1800x1000

EIP-1559, EIP-3198, EIP-3529, EIP-3541 and EIP-3554 — which are all part of the latest upgrade — have already gone live on the Ropsten testnet.

  • The total value locked (TVL) across the DeFi landscape has increased by over 14% over the past fortnight.
  • Despite its current positive momentum, Ethereum (ETH) is still showcasing a negative 30-day yield of 15%.
  • 100,000 ETH tokens were recently locked into the ETH2.0 staking contract, thus suggesting an increasing amount of market support for the altcoin.

Things seem to be looking extremely positive for Ethereum, the world’s second-largest cryptocurrency by total market capitalization, especially after the premier altcoin scaled up to a price point of $2,380 this week. As a result, the digital asset is currently exhibiting weekly gains over 15% and trading at $2,317.

This latest wave of bullish support has come in the wake of the Ethereum network deploying its much-awaited London Upgrade on the Ropsten testnet. The hard fork consists of several Ethereum Improvement Proposal (EIP) 1559 that seek to mitigate a wide range of the altcoin’s existing gas fee and congestion-related issues.

As per Ethereum’s envisioned roadmap, after the Ropsten testing concludes, the upgrade will be rolled out across other test-net environments — including Goerli, Rinkeby, and Kovan — over the next few weeks, in a step-by-step manner. If the execution goes as planned, experts believe that Etherum’s transition to the proof-of-stake (PoS) framework — which is slated to take place over the next year or so — will become much easier.

On the subject, James Beck, director of communications and content for ConsenSys, a firm that is currently involved in the building of ETHs burgeoning ecosystem, believes that by introducing the ‘base fee burn’ feature, Ethereum will face a lot of deflationary pressure, potentially transforming it into an attractive long-term store of value — a mantle currently held tight by Bitcoin. He then went on to add:

“In theory, the more transactions that occur, the more deflationary pressure that the burning of the base fee will have on the overall Ethereum supply.”

How to buy Ethereum

Momentum seems to be building behind the scenes

As per data released by analytics firm CryptoQuant, the day the London Upgrade went live on the Ropsten testnet, a little over 100,000 ETH tokens were staked and locked into the Eth2 deposit contract. At press time, the value of the aforementioned crypto haul works out to approximately $228 million.

This sudden surge in interest — especially when considering the day of the move — seems to suggest the positivity surrounding the Ethereum network. In fact, if EIP-1559 and EIP-3554 deliver on their long-standing promises of lower network fees, ETHs value could gain a lot of momentum in the coming few days and weeks.

Looking ahead

After $224 million worth of Ethereum options expired last week, the general sentiment surrounding ETH seems to have turned bullish. The Decentralized Finance (DeFi) market, which had been struggling, has been on a tear recently, with the total value locked (TVL) across the ecosystem, rising from $47 billion to $56 billion since June 27.

Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.

Disclosure: The author owns a range of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Ask an Expert provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site