Ethereum price analysis (April 13)

Bitcoin and Ethereum together constitute the bull market logic

Recently, the Ethereum market has been performing well and has maintained an upward trend of high-level shock breakthroughs. It has broken through historical highs several times in a week and has become the leader of the current market. As of writing, the highest price of ETH has risen to US$2,199, and the upward breakthrough trend is still very obvious.

Although the current highest price of ETH has only increased by 35.4% compared to the highest price of $1,420 in the last bull market, which is not enough compared to the more than 3-fold increase of Bitcoin, we should also see that compared to the lowest price of only around $80 in the bear market during the period, ETH has still achieved a return of more than 27 times after the bull market arrived.

More importantly, Ethereum is currently evolving, and its technological upgrades will bring even greater room for subsequent growth.

This is also the supporting logic for Ethereum to maintain its leading advantage in breakthrough rise when Bitcoin is unable to break through and the overall market is weak.

The development of Ethereum and Bitcoin belongs to two completely different directions:

Bitcoin is evolving towards being a financial asset, from the safe-haven attribute of "digital gold" to the payment purchasing function. The financial attributes of Bitcoin are the main value that empowers its market. Currently, investment in Bitcoin is more for its anti-inflation and good yield effects. Once the macroeconomic environment improves and the demand for asset safe-haven assets decreases, the purchase of Bitcoin will be affected, thereby hindering the continued development of the market, and the bull market may end at that time.

Ethereum is moving towards the path of technological application. With the upgrade of ETH2.0, Ethereum is undergoing a new transformation in technology. ETH2.0 has become an important breakthrough in solving the performance expansion of the Ethereum public chain. It can not only bring a high-performance public chain underlying network, but also promote the wider implementation of applications by improving network performance. The rise of Defi and NFT is an application scenario born in such a context. It not only improves the blockchain financial ecology with Bitcoin as the core, but also promotes the development of blockchain application value.

It can be said that the two different development paths of Bitcoin and Ethereum have constituted a huge ecosystem for blockchain applications, especially financial applications, which in turn has promoted the rapid rise of the blockchain industry and increased the exploration of practical applications of blockchain.

At the same time, this round of bull market in cryptocurrencies is driven and deepened by the explosion of Bitcoin’s financial value and Ethereum’s technology and applications:

On the one hand, changes in the macroeconomic environment have led to a sharp increase in pressure on traditional finance, bringing a large-scale inflow of mainstream assets such as institutional investment to Bitcoin, which has a constant amount of inflation resistance, thereby driving a sharp rise in Bitcoin prices and driving the rise of mainstream currencies, laying the foundation for a bull market.

On the other hand, the large-scale outbreak of Ethereum-based Defi has brought about a surge in the prices of related projects, triggering a large-scale outbreak of altcoins, thereby promoting the expansion and deepening of the bull market.

Therefore, Bitcoin and Ethereum are the two most important basic logics of this bull market, and the subsequent energy that will explode beyond Ethereum's evolutionary path is what is most worth looking forward to.

The core value built by Ethereum’s self-evolution

For Ethereum, the impossible corners of the public chain have always been an important shackle that has plagued its performance, and has therefore become the main reason for criticism. The emergence of EOS has cast a heavy shadow on the continued development of Ethereum.

Most of the new public chains have higher TPS, far exceeding Ethereum, which in turn has led to doubts that Ethereum cannot be expanded and will be replaced.

In ETH2.0, the transformation of the POW consensus mechanism to POS, sharding, Layer2, etc. are the core technologies to solve the above-mentioned performance pain points. Currently, the Ethereum beacon chain has been launched, and the amount of ETH pledged continues to increase.

This not only shows that Ethereum's technology upgrade has entered a substantive stage, but also shows that investors recognize the current technical route proposed by Ethereum and their expectations for future development space.

It should be said that Ethereum has now gotten rid of the curse of "inability to scale" and entered a new stage of development.

Currently, Ethereum is focusing on building a second-layer solution and is actively expanding the application foundation and implementation of Layer2.

Once Layer2 completes its basic construction and moves towards large-scale application, new application scenarios will inevitably emerge again. This is an important opportunity for the explosion of the Ethereum ecosystem, and it is definitely another important opportunity for the development of cryptocurrency markets including Ethereum.

SushiSwap co-founder 0xMaki said at the "2021 Co-Innovation Conference" that the market value of DeFi will exceed 100 billion US dollars. The new opportunity and trend of DeFi is that users migrate to Layer2 without directly interacting with the main network. In the future, we will see more and more projects deployed on EVM-compatible chains. Although Layer2 will bring fragmentation problems, Robinwood will appear in the future, which is completely built on Layer2 infrastructure. DeFi is building a new financial system that is completely different from the old financial system, and it is spreading rapidly.

Defi is the foundation of ETH2.0's performance expansion expectations. After solving the scalability problem of the public chain, the explosive large-scale landing applications will have new upgrades in business processing capabilities, number of users, and application experience. Therefore, the arrival of the Layer2 era will not only bring new development opportunities for Defi applications, but also promote the birth of more new application scenarios.

Ethereum will also form a "super public chain" based on a huge application ecosystem.

At present, the outside world's doubts about Ethereum have shifted from "inability to expand" to concerns about the security of Layer 2, which just proves the continuous evolution of Ethereum.

Anthony Sassano, co-founder of EthHub, tweeted: “It’s encouraging that we’ve moved from the ‘Ethereum doesn’t scale’ narrative to the ‘Layer 2 is insecure’ narrative. You know, when the haters move the goalposts, real progress is made.”

Although the rise of cross-chain projects represented by Polkadot has brought considerable competitive pressure to Ethereum around the concept of interconnected value Internet, according to the concept of cross-chain, even if Polkadot has the opportunity to become the underlying protocol of blockchain in the future, it will not be able to shake Ethereum's huge application-based ecosystem.

Perhaps in the future Ethereum may become part of a cross-chain, or directly evolve into a "super underlying network protocol foundation". The ecological empire that Ethereum has built through continuous self-evolution is enough to stand out from the crowd.

Even with its strong narrative background and prospects, isn’t Polkadot constantly and actively cross-chaining with Ethereum while taking advantage of Ethereum’s halo?

Therefore, the evolution of Ethereum has brought Ethereum stronger vitality and prospects, which is also the core value of Ethereum that investors value most.