Record chase continues: Ethereum breaks through 1,600 US dollar mark
Ethereum is breaking through the US$1,600 mark for the first time in its history. What’s more, Ether is now the third largest staking cryptocurrency in the world and a new upgrade could give the price an even further boost. Market update.
Ethereum reaches a new all-time high. Within the last 24 hours, the price of the world’s second largest cryptocurrency rose by more than 10 percent. On a weekly basis, ETH even gained 33.73 percent.
Ethereum 2.0 becomes third largest staking network
In addition, the huge rise in Ether’s price has led to Ethereum 2.0 becoming the third largest crypto network by staking capitalisation. This is remarkable as only a little over two per cent of all Bitcoin Billionaire Ether is currently in Ethereum 2.0 staking contracts, meaning there is still huge potential for growth. Only Polkadot (DOT) and Cardano (ADA) are currently ahead of Ethereum.
Deposits into the Ether 2.0 Deposit Contract have grown steadily since early December. In January, almost one million additional Ether were deposited for Staking. At the same time, the number of Ether validators has increased from 70,000 in the last 30 days to 91,392 at the time of writing. You can read more about how to become an Ethereum 2.0 staker here.
ETH soon a scarcer commodity than Bitcoin?
A new Ethereum Improvement Proposal (EIP) called EIP-1559 aims to solve the problem of high Ether transaction fees. The EIP-1559 was proposed back in April 2019 by Ethereum founder Vitalik Buterin and Ethhub’s Eric Conner.
It aims to introduce a fee market and burn mechanism to tackle Ethereum’s enormously high fees. So far, however, the EIP has not been able to gain traction, as some miners are opposed to it because their revenues could drop as a result of the upgrade.
Nevertheless, Buterin pushed again last December to introduce EIP-1559. The proposal advocates the introduction of a „base fee“ that would be burned to execute transactions, while miners would be rewarded with a tip.
Simply put, this means that Ether will become even more valuable to the entire Ethereum network. This is because some ETH has to be burnt for each transaction. Conversely, this leads to ETH becoming a scarcer commodity. This would also cause Ethereum’s inflation rate to fall below Bitcoin’s inflation rate. In an extreme case, Ethereum could even become a deflationary cryptocurrency.
DeFi tokens perform best
After trading of some cryptocurrencies and stocks on Robinhood and other trading apps has been disrupted time and again recently, more and more people seem to be flocking to the Decentralised Finance (DeFi) sector. Some DeFi tokens have been able to benefit enormously from these developments.