Analysts have voiced several positive factors for the popularity of Etherium. What are they?
Etherium fell to a local low of around $885 in June 2022, but the altcoin has more than doubled in value since then. Consequently, it has taken less than two months to achieve such impressive growth. At the same time, the asset’s trading dynamics have not yet declined, and there is no convincing reason for it to fall, at least in the near future, experts say. But there are enough factors for ETH growth, and the main one is the upcoming transition of the coin to Proof-of-Stake (PoS) consensus algorithm. Here’s a closer look at what’s happening with the cryptocurrency.
Etherium’s transition to PoS will take place around September 15 – and that’s a new date. As it became known the day before, the update will happen when the Total Total Network Difficulty, or TTD, reaches 58750000000000000000000. The TTD depends on the hashrate of the network and the block time. The higher the hashrate, i.e. the more processing power of the miners in the blockchain, the faster the update will take place.
In essence, it turns out that there is a fixed number of hashes left in the PoW network of Etherium to be mined. And when they are dealt with, the blockchain will transition smoothly to Proof of Ownership.
For Ethereum’s transition to PoS to take place exactly on 15 September at 15:00, the network’s hash rate must be equal to 872.2 TH/s. If the average is lower, then the update will happen later. So far the bordel platform representatives have oriented the update to take place on the morning of 15 September. Here is the relevant graph of the indicator dependency.
The TTD metric on the Etherium network
Once the blue line reaches the green mark, Etherium will begin creating blocks using the Proof-of-Stake consensus mechanism.
Why is the price of Etherium rising?
Let’s start with the main reason – the impending merger, as the procedure for moving to PoS is called. The procedure was successfully tested this week in Goerli’s latest testbed. Thus, the developers of Etherium have finished with the testing procedure and confirmed that the transition to Proof-of-Stake in the mainnet will happen without any delays. It will happen tentatively on September 15-16.
Here’s a relevant tweet from Ethereum fan Anthony Sassano.
The Goerli testnet has successfully gone through the merger and is now a PoS network. Next up is finally the Etherium mainnet. The merger is coming!
During the merger itself, the Etherium blockchain will split into two blockchains. One, represented by the PoW-based Ethereum, will be supported by miners, while the other will become the PoS version of Ethereum. The emergence of potential forks is pushing the price of Ethereum up, experts say. Why? It’s all about the fact that ETH holders will get an equal number of tokens from the PoW chain, meaning it’s an easy way to make a quick buck on the merger.
That is, the balances of cryptocurrency assets in the PoW network will now be duplicated in the PoS network. And if the coins on the rest of the chain don't lose value, there will be money to be made on it.
That said, it's important to keep in mind that USDT and USDC issuing companies, represented by Tether and Circle respectively, have already confirmed support for the PoS-chain exclusively. Accordingly, there will be no top-stablecoins within the network with miners.
Today, Etherium is trading at $1,885. And that may not be the limit: some analysts suggest that, all things considered, the value of ETH could rise as high as $2,500 as early as September.
It should be noted that such a forecast does not guarantee anything. Accordingly, investors should only rely on their own analysis and be ready for any scenario.
Etherium exchange rate
According to Cointelegraph’s sources, apart from the merger, one of these factors is also the positive picture on the altcoin’s chart. It may well reach the global downtrend line, which is just around $2,500 right now.
Global downtrend on the scale of the 1-week chart of ETH
Also worth mentioning are the notable institutional investment inflows into Etherium since the beginning of this month. According to CoinShares, ETH received $16.3 million in financial inflows from professional investors in the first week of August, while Bitcoin saw outflows of $8.5 million in the same time period.
Financial inflows into different cryptocurrencies
We believe that a successful upgrade will indeed be positive for Etherium. At the very least it will count as such, as Eth itself is a huge project and the scale of the move to PoS is also correspondingly large. In addition, the implementation of Proof of Ownership was a goal of the developers a few years ago, so implementing the plan will be an achievement one way or another.
If anything, we've outlined the major misconceptions on the subject of the Etherium update. You can read about them here.
Follow the market developments in our Millionaire Crypto Chat. We’ll talk about other topics related to the decentralisation industry there as well.
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