Ethereum miners threaten to disrupt the network, but tensions are eased
Like a rising tide lifting all boats, the global recognition Bitcoin achieved in March also helped Ethereum soar. The second largest cryptocurrency by market capitalization rose from a monthly opening price of $ 1,420 and closed the first quarter of the year at a high of $ 1,909 according to the exchange rate of CEX.IO. ETH investors achieved a monthly profit of almost 35%.
Ether started the month by announcing that Amazon Managed Blockchain is supporting smart contract blockchain, allowing users to set up Ethereum nodes and join the network using Amazon’s blockchain service.
Although the news was well received by software developers, it focused on a proposal to improve Ethereum’s transaction costs.
Ether’s core developers agreed to add the blockchain’s crucial EIP-1559 to the London fork in July. The idea behind the improvement suggestions was to burn part of the gas fees with every transaction in order to reduce the ETH supply. EIP-1559 could be viewed as a “buyback of ETH,” making Ethereum a deflationary asset
Some miners publicly opposed the update as it would affect their source of income. For example, SparkPool and Bitfly, two of Ethereum’s top mining pools, shared their concerns on Twitter, stating that they were “sad that so many people now only care about price”. As a result, the hashtag “# stopeip1559” received significant support.
While several community members threatened to move their hashrate to Ethermine for 51 hours, Ethereum inventor Vitalik Buterin promised a more immediate merger of Ethereum 1.0 and Ethereum 2.0. The merger would mean a more thorough transition to evidence of use and prevent miners from attacking the network.
As tensions between miners and Ethereum developers intensified, market participants became concerned about the stability of the network. The potential Indian crypto ban also served as fuel for a sell-off that saw ETH fall nearly 22% to hit a low of $ 1,550 on March 24.
Fortunately, the Hermez Network Ethereum Layer 2 solution has been launched on the mainnet, which promises to solve some of the well-documented congestion issues. Through the ZK roll-up technology, it was suggested that ETH would process large volumes of transactions and move digital assets valued at billions of dollars.
The announcement was well received by the crypto community along with Visa’s decision to allow digital currency payments directly on the Ethereum blockchain. Such positive developments allow Ether to make up for the losses incurred and close the month in greed.
The bull run is not over yet
April was historically the most bullish month for Bitcoin and Ethereum. The price data shows an average gain of 51% for both cryptocurrencies in the fourth month of the year. More importantly, Coinbase’s upcoming listing on NASDAQ could have a significant impact on prices as it will bring digital assets to a new realm of investors.
The market participants have already placed their bets for the coming weeks. With an open interest of $ 2 billion and a put / call ratio of 0.79, speculators are predicting that BTC will hit a price of $ 80,000 before the end of the month. Ethereum’s technical indicators are forecasting an increase of nearly 40% to a new all-time high of $ 2,500 or more.
Konstantin Anissimov, managing director at CEX.IO