Why Ethereum Becomes the Center of Crypto Economy
The 2021 events sparked a deep conversation about the future of cryptocurrencies and their role in the wave of innovation. At the heart of this enthusiasm is Ethereum . Ethereum is the second largest cryptocurrency with countless use cases.
The heart of the Cryptocurrency Economy
A researcher at a major analytics firm (Messari) named Ryan Watkins, has set up a tent with Ethereum in a debate over whether cryptocurrencies will be the center of the room. He used Twitter to show his unwavering belief in his ability to play a meaningful role despite the shortcomings of his assets.
“The market suddenly realized that ETH was betting on virtual cash, Metaverse, DeFi, NFT, and Web 3. All of which are integrated into one powerful asset,” Watkins said.
It’s hard to find any mistakes in his opinion, especially given the recent events surrounding the network. Facebook’s move into the Metaverse has increased the value of Ethereum-based platforms around the Metaverse, causing token prices to appear parabolic.
After the announcement of Facebook, the rise of Sandbox and Decentraland is focused on Ethereum. Since its announcement, Ethereum has reached a record high of $4,638, but asset trading volumes are now around $15 billion. With 4,444 NFTs becoming mainstream in 2021, what do you think was the driving force behind them?
The answer is Ethereum. It is considered the de facto home of DeFi, as multiple protocols are connected to the network and Ethereum accounts for more than 69% of DeFi TVL. Ethereum is already at the door as the network currently has over 3,000 dapps and the world is moving towards a decentralized future.
Decentralized finance bubbles
Not So Fast, Ethereum
Ethereum have to pass a long way to go prior to turning over Bitcoin, which controls 43.01% of the market share. Despite all of its impressive numbers, Ethereum occupies 19.5% of the market and needs to double its share before it can reach Bitcoin.
There is also the age-long problem of Ethereum gas fees which can stifle Network ambition to become the center of the crypto economy. Soaring gas prices have shifted the project to ETH killer such as Solana and Polkadot.
One user commented that “high gas prices have always been a problem” and wonders why networks are still dominant. Perhaps institutional investors are looking late and continue to buy assets.
The solution to the rising gas challenge of is in full swing with the development of ETH 2.0. The Altair upgrade was successfully deployed in late October, yet other upgrades are planned prior to the merger.
ETH Price Analysis; today
Ethereum has been declining since yesterday, down 3% in the last 24 hours. On the daily chart, It looks bearish and there is no bullish signal. The major altcoin has touched support for $4,375 and is currently trading near it.
ETH/USD daily chart by Trading View
Whilst the trading volume sold is low, it is likely to break out and will fall to the next level at $4,170. Such a scenario can occur when daily candles are fixed at less than $4,375. Ethereum is trading at $4,390 at the time of the press.