While Bitcoin (BTC) is the best-known cryptocurrency in the world, Ether (ETH), the currency of Ethereum apps, has actually been a better performer.
For example, this year, Ethereum price has moved up by almost 200% while Bitcoin price is up by around 60%. The story is the same when you consider the performance of the two in the past five years. Bitcoin has gained by about 1600% while ETHUSD has gained by more than 2,800%.
The chart below shows that Ethereum’s value against bitcoin has risen to its highest level in a year, reaching the resistance line of now 0.035 BTC. That’s still far lower than the 0.17 it reached in January 2018, but a new price level seems to have been reached.
Ether (ETH) / Bitcoin (BTC) ratio
Focus shifts to ETH 2.0
Analysts believe that Ethereum price will likely continue to do well ahead of the launch of ETH 2.0, which is the biggest update on the platform in years.
What is Ethereum 2.0?
Ethereum 2.0, is a major multiyear milestone for the blockchain network as it will mark the start of a shift from the miner-reliant proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) algorithm. In a PoS system, miners are not needed to mine blocks and verify transactions. Instead, users — or stakers — verify data on the blockchain (source: www.cointelegraph.com).
Why it matters
The culmination of over five years of research and development, Ethereum 2.0 is a highly ambitious upgrade.
Never before has the cryptocurrency industry seen a blockchain of the same size and value as Ethereum attempt to transition all users, as well as assets, to an entirely new decentralized network while keeping all operations on the old network active and running.
It will likely take many years for the Ethereum 2.0 upgrade – in all its complexity – to be complete. However, developer commentary featured in this report suggests the biggest hurdle (and perhaps most important milestone) in the Ethereum 2.0 roadmap is its initial launch (source: www.coindesk.com).
ETH 2.0 testnet to be released today
At the end of last week, developers released the validator launchpad for ETH 2.0, which allows users to participate in the testnet’s proof of stake. The ETH 2.0 testnet is scheduled to be released no later than today (4th of August).
In a statement, the next phase will require users of the platform to put up about 32 ETH stakes to run a validating node. More than 150,000 deposits worth more than $47 million have been deposited.
For now, there is no specific date at hand for the release of Ethereum 2.0, according to its testnet coordinator, Afri Schoedon.
Ethereum co-creator Vitalik Buterin also clarified that Ethereum 2.0 is on track, but if the client developers expect it to be done by the third quarter of 2020, then that is likely to be the case. However, three key metrics show that investors and users are highly anticipating the integration of Ethereum 2.0 within the year’s end. The metrics are rising growth of Ethereum addresses, increasing market demand for Ether (ETH) and surging on-chain user activity.
Long-time Bitcoin (BTC) investors such as the billionaire co-founders of the Gemini exchange, Tyler and Cameron Winklevoss, are among many high-profile investors who have expressed optimism toward Ethereum as of late. Speaking to Camila Russo, a former Bloomberg journalist and the founder of The Defiant, the Winklevoss twins said: “We’re big fans of ether. We have a material amount.”
In the medium to long term, the Ether futures market tailored for professional traders and institutions will also see a structural change. Upon the release of physically settled Ether futures contracts on the ErisX platform, which allow investors hold the ETH they buy and not entirely leave it in the hands of a third party, the CEO of ErisX, Thomas Chippas, told Cointelegraph: “We believe that Ether futures will bring broader market participation, a diversity of trading objectives and time horizons, more robust and resilient markets, as well as improved risk management tools, among other things.”
Key technical levels
Will the outperformance of Ether (ETH) vs. Bitcoin (BTC)? continue? ETH is often seen as the silver to Bitcoin’s gold, i.e it has more industry uses and less store of value uses. Ahead of Ethereum 2.0, traders might look at Ether (ETH) as a leveraged play on cryptocurrencies.
As of the end of last week, Ether (ETH) soared to its highest level in 2 years (see chart below – source: Bloomberg). It then traded above the $400 key level over the week-end before “flash-crashing” on Sunday morning as large selling orders took place during light trading hours. Since then, it has been progressively coming back but $400 is definitely a key resistance level to watch.
Ether (ETH) price in US$