Ethereum’s price performance certainly raises some serious questions, as the second-largest cryptocurrency on the market is clearly losing momentum and is unlikely to gain enough traction for a rebound at this time. But fundamentally it has at least five reasons to recover sooner than expected.
Ethereum’s price performance certainly raises some serious questions, as the second-largest cryptocurrency on the market is clearly losing momentum and is unlikely to gain enough traction for a rebound at this time. But fundamentally it has at least five reasons to recover sooner than expected.
Mt. Gox does not have ETH
The imminent risk of a Mt. Gox sell-off is one of the main factors weighing on Bitcoin. The administrator of the defunct exchange is scheduled to return a considerable portion of Bitcoin to creditors, which may intensify selling pressure. Because of this, Ethereum has a clear advantage over BTC, which could enter the market and lower its price.
German government won’t sell Ethereum
Selling pressure in the market has been exacerbated by reports that the German government has been selling seized Bitcoin. Bitcoin’s recent difficulties are partly attributable to this action.
On Ethereum, there is no selling pressure from miners
Since the launch of Ethereum 2.0, the proof-of-stake (PoS) consensus mechanism has replaced the proof-of-work (PoW) method. That implies that Ethereum miners will no longer have to sell a large amount of ETH to pay their overheads. However, to cover their costs for things like electricity, Bitcoin miners must constantly sell their Bitcoin.
Alex DovbnyaETH will also get an ETF
Ethereum, although not officially confirmed yet, is heading to become its own exchange-traded fund, much like Bitcoin. Institutional investors could be exposed to Ethereum through an exchange-traded fund without having to physically own the asset, which could increase demand.
Biggest supply shock on ETH
The introduction of a transaction fee burning mechanism through EIP-1559 has resulted in a significant reduction in Ethereum supply. A supply shock for the asset could occur as a result of this mechanism, reducing the total supply of ETH.
