Ethereum is on the brink of forming new highs after the “London” hard fork was confirmed to take place later this year, according to eToro market analyst David Derhy.
The upgrade will address a number of key issues that have been halting Ethereum adoption over the years, including the topical issue of mounting transaction fees.
Currently, to transfer Ethereum to another wallet a user needs to pay “gas” to the miner. The costs have skyrocketed over the past six months alongside the proliferation of the DeFi sector.
The new proposal will see a portion of gas fees get burned, effectively reducing the supply on Ethereum on the market.
“Ethereum prices rocketed back above $1,700 over the weekend, hitting a multi-week high after a major upgrade to the network was announced, and this move is far from over.” Said Derhy.
“However, under the new proposals – which have gathered support from users and application creators – gas fees will be sent to the network instead in a new fee structure called a “basefee”. Miners will only be given an optional tip by users, with the basefee set by an algorithm and thus easier for users to understand and check if they are paying a fair fee or not.
“The market is already welcoming the moves. Ethereum and Bitcoin prices have both rebounded over the weekend amid the news, and the latest expectations of further government stimulus; but there is more to come. We expect Ethereum to break new ground above $2,000 this year, with the hard fork and the fee changes all helping to cement its position as the number two cryptoasset, stoking further demand.”
At the time of writing Ethereum is trading at $1,736, rising by more than 20% over the past week.
For more news guides and cryptocurrency analysis, click here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.