In last week’s piece, we discussed the factors contributing to a recent crypto price surge. Ethereum price has continued to grow, now up 42% in 12 days.
EIP-1559 Due August 5
The hotly anticipated London hard fork containing Ethereum Improvement Protocol 1559 is now expected to take effect on August 5, rather than August 4 as most recently announced. The rollout has been plagued by delays, a source of frustration and mixed sentiment among the community, and many users remain skeptical that August 5 will see the update go live. However, a Reddit post pointing out that block 12,965,000 which contains the update is indeed on the verge of being validated.
The update will see Ethereum miners burning some of the ETH they earn, a controversial addition to Ethereum that could well have a positive deflationary impact on the network, possibly triggering upward price movement. Gas prices are expected to see a reduction as a result of the update, and gas tokens will no longer be in use.
The update is part of an overarching move towards Proof of Stake consensus that will see Ethereum greatly reduce its carbon footprint, becoming environmentally friendly and creating wider appeal for mainstream investors and corporations. News of the update has received mainstream media coverage throughout the world as interest in (and awareness of) Ethereum continues to grow.
ETH Price Rallies As BTC Flounders
Ethereum has seen a solid rally to above the $2,600, up 12.2% in the last week. Bitcoin has lagged behind slightly, up 2.5% at around $38,900.
Anticipation around potentially lower transaction fees and a deflationary supply has led to stronger sentiment around ETH. One potential roadblock would be a shortfall of miners, some of whom may leave Ethereum once the EIP-1559 protocol is implemented. Miners have long been concerned that the protocol will impact their net revenue, with several mining pools initially refusing to support the upgrade.
However, upward price momentum from the supply deflation could offset the losses in initial revenue, and whether miners flee Ethereum in significant numbers remains to be seen.
ETH has closed each day from Jul. 21 to Aug. 1 at a higher price, gaining 42% in 12 days. Increased activity in the NFT sector may also have contributed to the latest price action, with buyers such as Gary Vaynerchuk and Three Arrows Capital buying up NFTs from projects like Art Blocks and CryptoPunks.
On August 05, the DeFi Conference 2021 event will take place online. Discussion will focus on decentralized finance protocols and NFT projects and technologies. A wide variety of prominent figures in the DeFi industry are expected to attend as speakers, including the CEOs of Wanchain, Mintable, IntoTheBlock, and Bittrex Global.