Why the largest altcoin by capitalization looks more stable than the first cryptocurrency and to what level it can rise in price in the next month and a half
On November 10, Bitcoin and Ethereum hit all-time highs. The rate of the first cryptocurrency for the first time exceeded $ 69 thousand, and the altcoin – $ 4.87 thousand. After that, bitcoin rolled back and fell in price by 9%, at 19:50 Moscow time on November 12 it was traded at $ 62.6 thousand. The cost of Ethereum dropped from the maximum by 6.5 % and now stands at $ 4.55 thousand. Experts from RBC-Crypto explained that they support the price of altcoin and predicted how the coin might rise in price by the end of this year.
Ethereum is stable
The largest altcoin by capitalization looks stronger than bitcoin, says lead analyst at 8848 Invest Viktor Pershikov. According to him, Ethereum mining is more profitable for the industry than ever, and the internal inflation of the token is several times less than that of Bitcoin. Such indicators are important primarily for institutions running from inflation in fiat currencies, the analyst explained.
“The DeFi and NFT industries are supporting the Ethereum project. Against this background, the cost of the token is stable, “said Pershikov.
In early August, an update was released on the Ethereum network that changed the mechanism for calculating transaction fees. Some of the commissions that miners previously received as a reward are now burned. The value of destroyed tokens on the altcoin network on November 11 exceeded $ 4 billion.
Burning is the destruction of a part of tokens to reduce their number in circulation. This method is used to combat inflation and increase the value of cryptocurrencies. All coin burning operations are recorded on the blockchain as a transaction, so anyone can verify that the coins have been destroyed.
The main factor behind the growth of the Ethereum price in recent months is the reduction in the emission of altcoins, Sergey Zhdanov, CEO of the EXMO cryptoexchange, is sure. According to him, the Ethereum ecosystem is developing steadily and moving towards the transition to the Proof-of-Stake (PoS) algorithm.
Ethereum is currently running on the Proof-of-Work (PoW) algorithm. The main difference between PoS and PoW is that miners who generate computing power are not needed to maintain the PoS network. The health of the blockchain is ensured by the holders of digital coins and are rewarded for this. This process is called staking.
Growth prospect remains
A large amount of Ethereum was withdrawn from exchanges, and taking into account the burning, half of the daily emission of the altcoin is irretrievably destroyed, recalled Cryptorg CEO Andrey Podolyan. According to his forecast, by the end of the year, the cost of the altcoin may rise to $ 6 thousand, but the price movements of the token will depend on the dynamics of bitcoin.
By the beginning of 2022, Ethereum has the potential to consolidate above the $ 5,000 mark, Pershikov is sure. In his opinion, this will open up an opportunity for growth to $ 10,000 next year.
“I assume a possible price correction early next year, which will“ unload ”the market, so when buying BTC and ETH at current levels, I would recommend closing longs at the end of December and returning to them only after a meaningful correction,” the analyst warned.
By the end of this year, the price of Ethereum may exceed the psychological mark of $ 5,000, but after that, a short-term correction is likely to occur, Zhdanov says. Altcoin is able to reach the level of $ 6 thousand in December only if the growth of bitcoin slows down, the expert added.
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