Analysts at Steno Research believe that Ethereum remains undervalued and has the potential for significant growth. Similar to 2021, when ETH doubled its value relative to Bitcoin within a few months, this cryptocurrency is preparing for a new rise, particularly noticeable following the Federal Reserve's interest rate cut.
Since Ethereum's shift to Proof-of-Stake
PoS is a consensus mechanism where network participants (validators) create new blocks in proportion to the amount of cryptocurrency they hold in their wallets. on September 15, 2022, its value dropped by 48% relative to Bitcoin.
Last week marked the 2nd anniversary of Ethereum's Merge, during which the system transitioned from Proof-of-WorkPoW is based on computational power. to Proof-of-Stake. As part of this transition, the issuance of new Ether tokens has been significantly reduced: from 4% to less than 1% annually. The result has been a negative net supply growth, as more Ether is burned due to transaction fees than is released for stakers.
The native token of the Ethereum blockchain has risen nearly 8% since the beginning of the year, while Bitcoin has increased by 43%. But….
The significant lag of Ethereum behind its main competitor, particularly this year, is considered surprising by analysts at Steno Research, as they had previously held a very optimistic outlook.
During the last bull market, the price of ETH doubled compared to BTC. This was due to increased network activity and a boom in decentralized finance (DeFi), stablecoin issuance, and non-fungible tokens (NFTs), which were primarily built on the Ethereum blockchain.
The recent interest rate cut by the Federal Reserve is expected to boost network activity, positively impacting Ethereum.
Funds investing in BTC (ETFs) are unlikely to continue significantly outperforming ETH ETFs, as Ethereum has already proven its ability to surpass its competitor in the past.
Additionally, Ethereum developers have recently decided to split the upcoming upgrade, Pectra into two parts (The Prague/Electra — Pectra). Pectra is set to become the largest hard forkImplementing fundamental changes to the blockchain protocol's architecture. in Ethereum's history. The process is expected to begin in early 2025.
The main package will include eight Ethereum Improvement Proposals (EIPs), including EIP-7702, aimed at enhancing the user experience for wallets.
The second package does not yet have a clear structure, but it may include proposals for changes to the Ethereum Virtual Machine (EVM), known as EOF, as well as the introduction of the PeerDAS feature, which improves data availability selectivity and ultimately provides certain benefits for second-layer blockchainsA secondary framework or protocol built on top of an existing blockchain system..
P.S.
On September 18, a world premiere of the documentary about Ethereum and its founder Vitalik Buterin, produced by Optimist Studio, took place in 23 countries. Vitalik: An Ethereum Story can be watched here. The price of a virtual ticket is $20.00.
Source: Steno Research, ethereumfilm.xyz,
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