Three reasons why Ethereum has enormous potential in 2021


In 2020, institutional investors discovered Bitcoin (BTC) for themselves, and Ethereum (ETH) could be next in 2021 – three reasons why 2021 could be the most successful year in Ether history.

Ethereum shot above the $ 700 mark yesterday. For the first time since May 21, 2018, the second largest cryptocurrency in the world was able to break this important price mark.

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While the Bitcoin rate is currently experiencing a slight correction, the Ethereum rate has continued to gain. In the last 24 hours alone, the price rose by 13.61 percent. At the time of going to press, ETH is trading at $ 723.72 – what potential does Ethereum have in 2021?

Institutions will buy ETH in 2021

In particular, the announcement of the Ether Futures by the Chicago Mercantile Exchange (CME) has drawn the attention of many institutional investors to Ethereum. On February 8, 2021, Ethereum is to be listed on the world’s largest futures exchange. This gives the cryptocurrency further legitimation and makes it easier for large investors to access ETH.

Furthermore glaubt Ryan Watkins, an analyst at the crypto analysis firm Messari, said that the introduction of the Ether Futures will mean that many major investors will invest in ETH.

He is convinced that the adaptation of Ethereum in institutional circles will proceed much faster than with Bitcoin.

As soon as you accept that Bitcoin is valuable, it is much easier to see what potential other cryptocurrencies also have.

In addition, the listing of the ETH futures confirms the high demand for Ether from institutional investors.

Ethereum’s potential for companies and institutions

Although the ETH community is euphoric, Evan Weiss suspectsthat companies and institutions underestimate the importance and potential of ETH. Ethereum currently has a market capitalization of $ 83 billion and in the past seven days alone, the network has, according to CryptoFees, generates more than $ 4 billion in revenue every day. In addition, the cryptocurrency has the most widely used blockchain in the world and Evan Weiss assumes that nothing will change in the future.

Ethereum Fees
Quelle: CryptoFees

The Ethereum blockchain outperforms all other cryptocurrencies when it comes to generating fees. The Ethereum blockchain even outshines Bitcoin here.

Evan Weiss also believes the proof-of-stake mechanism will be attractive to institutional investors. With Bitcoin, a large part of the mining takes place in China and the network is therefore controlled by a few, according to Evan Weiss. This problem would no longer exist with ETH 2.0 after the complete implementation.

In addition, after the update, institutions and companies would be able to participate in securing the Ethereum blockchain much more easily. This is due to the fact that in PoS networks large investors do not need professional hardware to participate in the network. In addition, they would not need access to cheap electricity, just sufficient capital.

Therefore, Ethereum 2.0 offers a unique opportunity to own part of the next generation Internet.

Ethereum staking is a way to own a small part of the growing Web 3.0 ecosystem.

Evan Weiss suspects that major investors will not miss this opportunity in 2021.

Ether 2.0 and the consequences for the DeFi and NFT sector

The Ethereum community expects a lot from Ether 2.0 and in particular the scaling problem should be solved by the upgrade. This would take both the decentralized finance (DeFi) sector and the non-fungible token space to the next level. Still, there are risks. Ethereum 2.0 staking is in direct competition with many DeFi products, which could lead to capital draining out of the DeFi sector as it is more profitable to stake Ether. In addition, technical problems could arise when transferring existing DeFi applications to ETH 2.0.

Despite the risks, it can be assumed that ETH 2.0 will not have a significant effect on the liquidity in DeFi space in the next 9-12 months. The upgrade is only in the first phase and it should be some time before it is fully implemented. In addition, the solution to the scaling problem should enable further innovations in the DeFi space.

While there are some risks to the DeFi space, it is likely that ETH 2.0 will primarily benefit the NFT sector. The sector is not in direct competition with the staking model of Ether 2.0 and should therefore be able to grow dramatically.

In particular, ETH 2.0 should allow the entire Ethereum network to grow in 2021. It is likely that this will also be reflected in the Ethereum course.

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