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Saturday, October 16, 2021

Ethereum Price Might Not Be Able To Hit $5,000

The price of Ethereum has been on a downward movement ever since the founder brought out the dirty laundry of the cryptocurrency in 2021. In a fireside chat session at the StartmeupHK Festival, Vitalik Buterin stated that there were quite a few internal conflicts going on that were causing the Proof-of-stake migration to be delayed.

As has been reported by Cointelegraph, the Phase One approach of the cryptocurrency introduces much-needed scalability through sharding- but it has been postponed for the next year. Also, DeFi’s inherently decentralized nature might not be profitable just yet- due to the sharding-style processing. 

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Nonetheless, there are three factors that would negatively impact the price of Ethereum in the short term. 

The Ethereum London Fork Delay

The hard form of Ethereum London is simply a part of a wider roadmap to the final release of Eth2 that will be launched in 2022. This will negatively impact the cryptocurrency because the miners would be the ones affected the worst by the EIP-1559 proposal, which will be burning a major part of the fees that is generated on the blockchain of this cryptocurrency. 

Miner Exodus

This is a pretty simple prediction- once it becomes clear to the miners of ETher that their main source of revenue will most definitely be going down, it would just be a matter of time before they move on to some other competing network. 

Multi-chain DApps

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The longer it will take for the Eth2 to get itself implemented fully, the higher will be the incentives for adding support through multiple chains. 

In the end, it would be Ethereum itself which will be destroying the network due to it postponing the scaling solution. This will definitely push users to alternative solutions.

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