Bitcoin stagnated over the weekend, while Ether gained 3.7 percent ahead of Wednesday’s London upgrade
The crypto market seems to be recovering well after almost all major cryptocurrencies posted positive gains over the past week. This is certainly true of the two largest coins by market capitalization – Bitcoin delivered returns of 12.5 percent last week, while ether rose 16.5 percent over the same period.
Bitcoin’s growth slowed towards the end of the week, and the cryptocurrency fell by 5,6 percent over the weekend. Meanwhile, Ether showed no such signs of stagnation, rising 3.7 percent over the weekend. As a result, the ETH/BTC chart has risen by 9,9 percent in the last two days.
A likely reason for Ether’s ongoing rally is the highly anticipated Ethereum London hard fork, which is scheduled to take place on Wednesday. One of the Ethereum improvement proposals (EIPs) to be introduced as part of the upgrade involves the introduction of a base fee burn.
This change will mean a significant decrease in the inflation rate of Ether, which currently stands at about 4,4 percent. With EIP 1559, that number could drop to 1.7 percent, which is roughly the same as Bitcoin’s inflation rate last year.
There are now almost 6.5 million ETH in the Ethereum 2.0 custody contract, which is worth almost $ 17 billion and 5.5 percent of the circulating supply. With the upgrade in London, the full launch of Ethereum 2.0 and the transition to the Proof of Stake algorithm, which is scheduled to occur later this year, is getting closer and closer.
Raoul Pal, Founder of Real Vision, tweet yesterday: “I’m writing to Global Macro Investor right now and I don’t want to spoil anything in advance, but so many people look at the on-chain analysis for BTC and forget about ETH. On-chain data + August 4 + network growth = ridiculous, ridiculous supply bottleneck (doubly ridiculous for emphasis in case you missed it)“.
Other market commentators have echoed this view.
Institutional investors ‘ interest in Ethereum has also increased. Last month, Fidelity announced plans to make Ether available to its hedge funds, family offices and institutional clients by March 2022. Automated investment firm Wealthfront later integrated the Grayscale Ethereum trust into their offering of investment opportunities.
Even senior analysts at JPMorgan previously suggested that Ethereum’s appreciation could push the industry up to $ 40 billion by 2025. Goldman Sachs has also been positive about Ethereum, suggesting last month that Ether could overtake Bitcoin as the dominant financial asset in the coming years.