Can Etherium bypass Bitcoin in terms of investment attractiveness?


From the beginning of 2021, Ethereum demonstrates a very active growth to the US dollar. At the time of 14 hours 15 minutes on January 27, Moscow time, the eth / usd pair showed an increase of 76% according to the CEX.IO exchange, despite the fact that the BTC / USD pair showed an increase of 9%. If you compare the two of these cryptocurrencies directly, then the ETH / USD pair shows an increase of 61% from early 2021 to January 27, 2021.

Such a defraction in the price dynamics between Bitcoin and Ethereum eloquently demonstrates the possible reduction in the difference in the relative growth rates of two cryptocurrency, which was formed against the background of BTC / USD rapid growth in November — December 2020 and significantly more modest growth of ETH / USD for the same period.

We also noted that as ETH / USD approached the historical maximum, the volume of marginal trading in this pair grew stronger than in the BTC / USD pair. In December 2020, ETH / USD marginal trade exceeded the September volumes by 3.8 times, and November — 2.3 times.

In our opinion, such a rapid growth of ETH / USD has two most obvious reasons: take off the market for decentralized finances since the beginning of 2021 and the simultaneous transition of Ethereum on Beacon Chain. The growth of DEFI increases the demand for Ethereum as a platform for transactions, which leads to an increase in commissions for the transaction and increases the award for the block. And from the moment of termination of the phase 2 ETHEREUM 2.0, a full-fledged transition to a new blockchain will occur, in which the transaction processing will occur according to the consensus model based on the proportion of the share, that is, the tokens themselves will serve as a means of receiving a reward for the block.

It is possible to say that the waiting for this event has already changed the model for the formation of the cost of ether-tokens Ethereum — since the possibility of receiving passive income from the Ethereum blockchain with the help of Staying is a significant factor in increasing demand for this asset.

Starting Ethereum 2.0 or Serenity promises large-scale changes to the project at the protocol level. The embedding of the sharding will help divide the nodes of the blockchain on the shards — groups that combine a few nodes — which will process a specific transaction pool with a consensus inside the shards, which will solve the problem of scaling arising from the need to achieve a consensus between all nodes of the blockchain.

It is expected that sharding will increase the possibilities of Ethereum to process transactions up to 15,000 or more transactions per second, which will be sufficient for mass use Ethereum as a payment platform along with centralized payment systems as Visa and MasterCard.

This will definitely reduce the average size of the Transaction Commission on Ethereum 2.0, but with a possible potential for EtherEUM 2.0 bandwidth growth, the commission per unit may even grow compared to the current POW version of Ethereum.

Taking into account the prerequisites for the development of Ethereum as a means of means, we expect to further increase this asset in the medium and long term. Initially, the end of the phase 0 Ethereum 2.0 was scheduled for 2020, and the end of the phase 2 to 2021. As a result, the phase 0 started on December 1, 2020, and the termination of the ETHEREUM transition to Beacon Chain remains very uncertain. It is very likely that it will take place no earlier than in the second half of 2022.

Nevertheless, we expect the ETH / USD planned growth for 2021. The main goal by ETH / USD for 2021, we consider the mark at 2.196 points. At the same time, we expect a corrective movement of at least 891 points before continuing further growth.

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