On Tuesday morning, Ethereum soared to an eight-month high in anticipation of its long-awaited network update.
During its 24-hour peak, the price of the cryptocurrency reached $1,884, a level not seen since August. According to Messari, Ether has reduced some of its gains from its morning peak, although it has still increased by about 4% over the past day.
The “Shapella” upgrade, which is scheduled for April 12, will complete Ethereum’s switch from a proof-of-work (PoW) to a proof-of-stake (PoS) network. For the first time since the previous Merge upgrade in September, users will be able to withdraw their staked ether during the event.
The switch from a PoW to a PoS network lowers the network’s energy consumption by 99.9% and enables users to stake their cryptocurrency to generate additional passive income. This is the procedure for receiving compensation for making contributions to the blockchain network.
According to Nathan Thompson, lead tech writer at cryptocurrency exchange Bybit, “while analysts debate the short-term effects of this upgrade, it’s unquestionably bullish for Ethereum going forward as it significantly reduces its energy consumption and provides more favorable ESG optics when compared to bitcoin.” Moreover, “Ethereum’s roadmap’s slick updates and constant delivery have bolstered investor trust and sparked the interest of institutional investors.”
Despite hazy macroeconomic conditions brought on by the Federal Reserve’s interest rate increases and a number of high-profile banks collapses, the cryptocurrency markets have been booming. In the last three months, the prices of Bitcoin and Ethereum increased 67% and 49%, respectively.
According to Ben Caselin, Vice President of crypto exchange MaskEX, “With the US financial system at risk, we’ve seen an increase in both bitcoin’s price and bitcoin dominance relative to the rest of the crypto market.” “As has frequently been the case historically, a rebound in investor confidence and vigour can find expression in a so-called “altcoin season” following a significant and protracted bitcoin surge.”