On Sunday, July 4, Ether updated its two-week maximum value at around $ 2.3 thousand. As of July 5, the cryptocurrency rate is $ 2.2 thousand. Yesterday, the altcoin market capitalization reached $ 274 billion. The growth of quotations on the weekend occurred after the Friday expiration of Ethereum options for $ 230 million.
Ether rises in price ahead of the London hard fork, which is due to take place on the project’s main network on July 21. The update was launched on testnet on June 24th. It was supposed to be implemented at the end of spring, but then it was decided that the commissioning would take place in the middle of summer. It is expected to have a positive impact on altcoin quotes thanks to several changes, including the introduction of a feature that will reduce the number of tokens in circulation.
London update and Ether price hike, what’s the connection?
The London update will take place as part of the cryptocurrency’s transition to protocol 2.0. This solution will scale the original blockchain and make it more user-friendly. The main feature of Ethereum 2.0 is the network’s transition to Proof-of-Stake (PoS) consensus, which does not involve mining. Now, altcoin, like bitcoin, works on a Proof-of-Work consensus. That is, the price increase is due, among other things, to the fact that the network increases its scalability.
Also, the update will bring a decrease in commission to miners and improve security. The miners are unhappy, but no one asks them anything. Gas payments will fall, and with it profitability. The miners even tried to protest, but nothing happened.
As for the impact of such spikes on the price of cryptocurrencies, Ether could gain significant weight. The fact is that today no one cares about the problems of miners. Primarily, cryptocurrencies are growing due to the attention of investors. If the big fish sees positive changes in the market, then the cryptocurrency will rise in price. Note that the developers plan to make the so-called deflationary model, and some of the commissions (or all) will be burned, which will reduce the emission of Ether. We turn on the logic: fewer coins – higher price. Obviously, the developers own huge assets in Ether and just want to make them more expensive through various manipulations.
Last week, 600 thousand Ethereum ($ 1.28 billion at the exchange rate at the time of the transaction) was transferred from the Binance crypto exchange to an unknown wallet. The commission paid for the transfer was $ 0.61.
Will the developers keep their promises?
Against the background of the rapid growth of the coin and the overcoming of the psychological barrier of $ 2,000, investor confidence, expectations that ETH will overcome the barrier even of $ 5,000 in the near future, a situation may arise where hopes for a reduction in commission fees will not materialize. The desire to earn even more on them is great, because capitalization is growing. Why not promise users low commissions again? Whether the developers together with V. Buterin will keep their promises or not, we will find out in a few months.
While the coin is in a steady bullish trend, the market capitalization is about to reach $ 280 billion, the scalability of the network is growing. How long will the euphoria last? Perhaps until users see commissions rise again, despite promises of lower fees.