- Analysts say ETH is bullish for the short term only.
- This reasoning is based on various facts pertaining to the delay of Ethereum 2.0.
- Amid the rising gas fees on the Ethereum network, users may migrate to other blockchains.
Tensions are high as Ethereum 2.0 is delayed. Investors and Ether (ETH) hodlers alike are restlessly waiting for its launch and the inevitable price surge it will most likely bring. However, due to varying reasons, we may not see the crypto hitting $5,000 anytime soon.
At the moment, ETH is showing bullish signs. Most analysts believe this is just for a short time. Many factors could soon contribute to the price staying at its current position for a while. Ever since Ethereums’s launch, its founder — Vitalik Buterin, has been teasing an eventual update.
Specifically, this update will bring Proof-of-Stake (PoS) consensus to the blockchain. According to Buterin, this update was thought to take a year’s time to accomplish. Now, Buterin says it will take six years. He adds that this is not because the technology is challenging, but because people are challenging.
Naturally, the six-year-long delay for the much-needed PoS algorithm has made investors hold back and consider other alternative blockchains like Tezos, Solana, Polygon, XinFin, Binance Smart Chain, and Cardano.
Besides, the Ethereum blockchain is drowning in incredibly high gas fees. The need for PoS cannot be more critical. With the growing popularity of DApp and blockchain gaming, Ethereum will see its downfall by its own success unless it manages to launch Ethereum 2.0 as soon as possible.
Additionally, the EIP-1159 proposal coming with Ethereum’s London hard fork will be making a huge impact on mining. In particular, this proposal will initiate burning a part of the generated fees on the blockchain. This, in turn, will cut part of the miner’s revenue made on the blockchain.
So, as miners see that their revenue source is shrinking, they may choose to migrate onto other blockchains. This may further affect the price of ETH making it less likely to hit $5,000 in the near future. In relation to this DApps may also choose to launch on other blockchains over Ethereum.
Many DApps like AAVE and Curve have already added support for their networks to ensure smooth running on other blockchains. At this rate, if the network delays its release any longer it will be its own worst enemy.
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