Ethereum got a bit of a lift this week with the deployment of the Ethereum 2.0 deposit contract. ETH prices cranked as Bitcoin made a push to $16,000 suggesting that Bitcoin’s influence is still the biggest driver of Ethereum momentum.
ETH is up over 8% on the week, currently trading for $430 to reach its highest price in two months. However, it remains almost 70% down from its all-time high nearly three years ago.
Here is what could drive Ethereum, which was even featured in the U.S. Presidential elections, to even greater heights.
The upside on Ethereum can't be overstated. If you don't understand. I'm sorry.
— 🔥Pentoshi🐧 (@Pentosh1) November 6, 2020
Ethereum Staking Opportunities
The ETH 2.0 deposit contract has opened the door to staking opportunities for early investors and Ethereum aficionados, however, the uptake by the masses is likely to be a little slower. At the time of writing around 33,000 ETH had been staked, worth an estimated $14 million at today’s prices.
Mainstream staking likely won’t begin to take off until exchanges simplify the process. Currently, validators need their own hardware, software, and stable power and bandwidth supplies in order to contribute. The complicated nature of early-stage staking is likely to put off the majority of ETH holders.
Additionally, with high street banks barreling towards negative interest rates, Ethereum staking could be seen as a more stable method of saving and earning when traditional methods have dried up.
Despite the emergence of various Ethereum killers, the network is still the backbone of all things decentralized finance (DeFi) related. This is unlikely to change as the Ethereum smart contract and token protocol is the industry standard with the largest community of developers.
As DeFi grows and matures from its current state of cloning and rug pulling, the role of Ethereum will likely become even greater. This, in turn, should create a higher demand for the asset to push prices higher.
This summer’s DeFi boom had strained the network to the point where smaller transactions were not viable due to skyrocketing gas prices. While there were a lot of complaints from average users, it proved that Ethereum is the financial fuel for this new decentralized monetary landscape.
Scaling solutions are being rolled out faster than ever and the launch of Phase 1 of ETH 2.0 should help to solidify its position even more. Before that happens though, EIP 1559 may be deployed to tackle the problem of high network fees.
The future for Ethereum is looking bright for the time being and considering it’s so far behind Bitcoin in terms of its path back to an all-time high, it can still be considered largely undervalued.