Ethereum (ETH) is on the rise, and there’s one analyst who thinks it could overtake Bitcoin (BTC) as the world’s largest cryptocurrency.
Bodhi Pinkner, an analyst at crypto asset manager Arca, told Bloomberg that his firm has “a favorable view of Ethereum” and that a flippening is “very possible.”
Pinkner also said that following the Merge — an upgrade expected to take place in September — Ethereum will become a deflationary asset, as the native cryptocurrency ETH will be burned.
“So that changing dynamic bodes theoretically well for Ethereum’s price relative to Bitcoin, especially in an environment of tightening,” Pinkner was quoted as saying by the publication.
There is no question that the Merge will be a big game-changer for the Ethereum network. One of the most significant changes is that ETH will be burned instead of being mined like it is now. The result of this is that there will be less ETH in circulation, making it more scarce. This could have a positive impact on the price of ETH, as demand could outstrip supply.
In fact, on July 21, IntoTheBlock research director Lucas said in a tweet that ETH will become deflationary after the Merge with the issuance decreasing between 0.5% to 4.5% depending on network fees.
$ETH will become deflationary following the merge
ETH's net issuance is likely to range between -0.5% to -4.5% depending on network fees
Here is a projection of what that would look like based on 2022 historical data pic.twitter.com/KdWq072Mbz
— Lucas (@LucasOutumuro) July 22, 2022
Ethereum’s switch to a proof-of-stake system would also have a number of other implications for the network.
Under the current system miners are rewarded for their work in verifying transactions and maintaining the blockchain through the issuance of new ETH. However, this process is becoming increasingly centralized and costly, as large mining pools have begun to dominate the network.
The proof-of-stake system would address these issues by moving away from the current ‘proof-of-work’ model, in which miners are rewarded for their computational power. Under proof-of-stake, ETH holders would instead stake their tokens in order to validate transactions and earn rewards.
This would have a number of advantages over the current system, including increased security, lower costs, and improved scalability.
Vitalik Buterin, the co-creator of Ethereum, revealed at the Ethereum Community Conference in Paris that the Merge is only one aspect of the broader development plan. According to Buterin, the Ethereum roadmap includes four stages: Surge, Verge, Purge, and Splurge. Buterin also said that the team will continue to focus on scaling, efficiency, speed, and security.
So, it looks like Ethereum is primed for big things in the near future. Could it flippen Bitcoin? Only time will tell.
ETH was last changing hands at $1,718, up less than one percent intraday. The native token of the Ethereum blockchain has a total market capitalization of $208 billion.
As per CMC, Ether’s 24-hour range: $1,678.11 – $1,745.88.
Risk Our Money Not Yours | Get 50% Off Any Account
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply