Ethereum (ETH): Because the price performance of Ethereum appears to have slowed down and because there is now no reason for a comeback, there are many important questions that arise about the future of the cryptocurrency that is the second-largest on the market.
These uncertainties are a result of the fact that Ethereum’s price performance appears to have slowed down. From the other side of the coin, there are at least five primary reasons why it might rebound more quickly than was initially anticipated. A list of these causes can be seen below.
Mt. Gox does not have any ETH
Several important issues are weighing on Bitcoin, one of which is the looming potential of a big sell-off from Mt. Gox. As a result of the trustee of the defunct exchange being scheduled to refund a sizeable chunk of Bitcoin to creditors, the amount of selling pressure may increase. As a result of this, Ethereum has a significant edge against Bitcoin, which may enter the market and cause its price to decrease.
There have been allegations that the German government has started selling off the Bitcoin that has been seized, which has increased the amount of selling pressure that is being exerted on the market. The recent challenges that Bitcoin has been facing can be partially attributed to this action.
On Ethereum, there is no miner sell pressure
With the release of Ethereum 2.0, the Proof-of-Stake (PoS) consensus mechanism replaced the Proof-of-Work (PoW) technique. PoS stands for Proof-of-Stake rather than Proof-of-Work. The fact that Ethereum miners can pay their expenses without having to sell a large number of ETHs is very optimistic for the cryptocurrency. This is very encouraging for Ethereum. Mining Bitcoin, on the other hand, necessitates miners to continually sell Bitcoin to fund expenses. Such as the cost of power.
ETH will also get an ETF
Since the release of Ethereum 2.0, the proof-of-stake (PoS) consensus mechanism has replaced the proof-of-work (PoW) strategy. This change occurred because PoS is a more secure method of reaching consensus. This means that Ethereum miners will no longer need to sell a considerable quantity of ETH to cover their overhead costs. This is the implication of this. Despite this, Bitcoin miners are required to sell their Bitcoin regularly to cover their expenses. Which include things like the cost of power.
Also Read: Latest Crypto News About the Blockchain Industry
Greater supply shock on ETH
Since the introduction of EIP-1559, which includes a burning mechanism for transaction fees. There has been a significant fall in the amount of Ethereum that is available. This is because the system burned transaction fees. This decrease is a direct result of the implementation of EIP-1559, which has brought about this transformation.
As a direct result of this, there has been a significant reduction in the quantity of Ethereum. That is now available. Because of this mechanism, there is a risk that the asset might go through a supply shock. Which would ultimately lead to a considerable reduction in the overall supply of ETH. This would mean that the total supply of ETH would be significantly reduced. Finally, a supply shock is produced as a consequence of this restriction in supply coming into effect.
