Ethereum (ETH) Moves Past $2600 Levels As London Hardfork Approaches Ahead
Along with the broader market recovery, the world’s second-largest cryptocurrency Ethereum (ETH) has shown significant gains. The ETH price moved past $2600 levels over the weekend over the excitement of the upcoming London hard fork ahead this week on August 5, 2021.
The London hard fork will provide a gateway to the implementation of the the Ethereum 2.0 Proof-of-Stake (PoS) blockchain network scheduled for launch next year. Over the last week, Ethereum (ETH) has gained more than 20% registering its one of the strongest price rallies for this year. However, ETH is still trading over 40% down from its all-time high of $4400 during mid-May 2021.
The London hard fork will deploy the much-awaited EIP-1559 protocol on the Ethereum blockchain network. This aims to significantly reduce the inflation rate of ETH gas fee thereby making the Ethereum blockchain deflationary in nature.
While Ethereum investors and network users like DeFi, NFTs, DApps etc. have appreciated this development, the miner community has criticised it strongly. This is because the EIP-1559 implementation will significantly cut down the miner revenue.
The existing Ethereum network continues to face congestion issues even today. Since Ethereum is home to a majority of the DeFi and NFT applications, it seems a very high network activity. Last week itself, Stoner Cat NFTs clogged the Ethereum network with over $800,000 worth of ETH being lost in failed transactions.
Similarly, over the last week, million of dollars worth of CryptoPunk NFTs were sold on the Ethereum blockchain. The non-fungible tokens (NFTs) market remains hot this year and just like DeFi tokens dominated the summer of 2020, NFT tokens are dominating the summer of 2021.
As per the Coinbase report released last month, Ethereum has delivered a strong show outperforming several other asset classes including Bitcoin, during the first half of 2021. “The second most valuable crypto asset appreciated 895% over the 12-month period and 210% over the 6-month period ending June 30”.
On the other hand, the institutional participation in Ethereum continues to increase further. The Coinbase report notes: “Many of our largest institutional clients, including hedge funds, endowments, and corporates, increased or added first-time exposure to ETH in H1, believing the asset has long-term staying power tantamount to BTC’s while playing a differentiated role in their portfolios”.
Financial giant Fidelity is also working on introducing Ether trading options for institutional clients including family offices, hedge fund, and institutional clients by March 2022.