Ethereum, the blockchain of choice for the majority of app developers and the second-best favored cryptocurrency, has created a record of upgrades and updates to the system so far, all aiming to benefit the cryptocurrency ecosystem. It represents almost 20% of the $1.1 trillion global market, a figure that secures its spot as the safest long-term bet after Bitcoin in terms of cryptocurrency investments.
The development team behind the token has deployed a set of improvements aimed at boosting scalability, transparency, operability, and cost-effectiveness in the network, additionally contributing to worldwide sustainable efforts through a diminished CO2 footprint by 99.99%. Needless to say, among the most burning questions that always arise before an upgrade’s deployment is whether the events will have an impact on the Ethereum price and to what extent it can trigger changes in the value.
The world is patiently waiting for the Dencun upgrade, which may have more implications than a major overhaul of the network, possibly leading to a price hike.
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What is the Dencun upgrade?
Ethereum has so far undergone a set of upgrades to the system, with Dencun being expected to be the next one, occurring somewhere by the end of the year, though the exact date isn’t set in stone. This update is projected to bring significant improvements to the network by inaugurating the “blobs”, a feature intended to boost roll-up scalability on Ethereum.
For those who are yet to familiarize themselves with Ethereum, the “Dencun” term makes reference to two significant upgrades, namely Cancun and Deneb. The first is aimed at improving Ethereum’s execution layer, whereas the latter will have implications for the consensus layer.
As such, the Cancun update will launch a number of Ethereum Improvement Proposals, or blockchain refinements will enhance scalability, storage, and efficiency. The modifications are expected to regulate block rewards and ensure a smooth shift to Ethereum 2.0 by delaying the rising mining difficulty. You must read this article to get more info.
Looking at price modifications following the Merge
The Merge is widely regarded as one of the most important events in cryptocurrency and blockchain up to date, given that it reduced the asset’s carbon footprint almost totally, put an end to the energy-consuming mining process, and improved transaction speed, security, and costs. While the shift was welcomed with open arms, the fact that many investors waited to see improvements in the price area shouldn’t be overlooked. The event was only positive concerning the blockchain’s functionality, not impacting the token’s price to a level that could benefit investors’ portfolio investments. The Merge was thus more like a “non-event”, pushing the token’s price a little higher immediately after the upgrade was deployed, but seeing it stagnate in the days to follow.
On the contrary and unlike the Merge, the Shanghai hard-forking upgrade that completed the series of improvements positively impacted the token’s value. The price rallied and surpassed the $1.700 threshold in February for the first time since August of last year. The enhanced market conditions of those times fueled a price spike and pushed more investors to add cryptocurrency to their investment portfolios. However, as market changes are nothing out of the norm in the case of assets that are in their developmental stages, Ethereum and other cryptocurrencies suffered price slumps, especially in the wake of the bankruptcy of Silvergate Bank that send shockwaves through the ecosystem. Were it not for the daunting collapse of the major American bank, cryptocurrency may have continued to secure its position.
Can Dencun make Ethereum skyrocket?
Considering every innovation and advantage that the upcoming upgrade aims to bring to the network, as well as how well-awaited it is by the crypto audience, Ethereum may react positively to the event as it approaches, as well as after its completion. Such an impact may come about as a result of investors’ continued interest in the asset and built-up confidence in Ethereum’s power to generate passive income. By adopting a bullish perspective from analyzing the Ethereum Rainbow charts, it’s safe to say that Ethereum’s price may witness hikes, with experts believing it could surpass its $3.000 psychological level. However, by considering a less fortunate scenario, the token’s price may stick around its present levels.
How to prepare for the upcoming Ethereum update?
Indeed, predicting or projecting Ethereum’s price or the value of any other cryptocurrency is difficult, if not impossible. Therefore, you should treat the upcoming events with common sense, not expecting to become richer overnight, regardless of what upgrade the system is awaiting. Historically, past improvements on Ethereum brought a host of advantages but were not that impactful on the price. This is a good thing, as you can rest assured knowing the update will have no negative implications for your token’s price. What can, instead, play with your funds is widely represented by market declines, bad media news, financial system failures, and other elements that are known to take the trajectory down. However, when it comes to deploying upgrades, approaching cryptocurrency with modest aspirations is the best way to safeguard your investment portfolio from losses.
Is Ethereum a good investment?
Historically speaking, Ethereum has proven to be a profitable investment for investors who knew how to weather past storms and when to make entry or exit points. In this regard, a well-developed strategy can turn genuinely helpful, though it requires a certain level of experience, crypto market knowledge, and an up-to-date approach.
Ethereum is a highly volatile asset whose rises and falls are unpredictable. However, for many investors, it is its unpredictability that lures them into putting money into the asset, as its nature makes room for quick returns on investment.
If Ethereum is a good or unprofitable investment is debatable, and it all comes down to several characteristics of the trader, like their risk tolerance, outcome expectancy, and strategy held. As such, if you are going to break into cryptocurrency, a little thorough research can help you feel more prepared for whatever situation the market may go through.