- ETH price wavers near $1,550 following 2023’s bullish start.
- Market players are contemplating why the current price levels are lucrative to accumulate Ether.
- Staking, deflationary status, and developer activity are some of the things making the smart contracts coin the best.
Ethereum (ETH) has played a vital part in creating the crypto ecosystem globally. Though multiple blockchains arrived after Bitcoin’s 2009 start, Ethereum became a leading focus regarding speculation.
That’s because of many potential applications it may present upon project success. Now, Ether is the 2nd-largest crypto, with $187 billion in market cap. So let us assess reasons why ETH could yield impressive longer-term returns.
Developer Activity
Though a good start, 2022’s second half was brutal, forcing substantial losses for investors as primary players in the industry debacle. In addition, many projects deteriorated because of a need for more money or affiliation.
However, Ethereum maintained healthy developer activity. The Ethereum blockchain witnessed 234 new developers onboarding from December 2021 to December 2022, with around 5,750 developers maintaining the smart contract blockchain.
Developers and their activity are among the best approaches to measuring a blockchain’s value. Furthermore, as the developer report from Electric Capital indicated, Ethereum’s developer ecosystem is 2.8X more than the following platform – Polkadot.
Deflationary Status
Since Merge’s implementation 126 days ago, the Ethereum network has destroyed/burned 2,464 $ETH. That is because the Merge upgrade was a hardfork that shifted ETH from PoW (proof-of-work) to PoS (proof-of-stake). Contrarily, if the platform maintained the proof-of-work mechanism, we would have seen 1.48M $ETH added to the blockchain.
From a longer-term view, the deflationary characteristics make ETH a leading investment vehicle. Remember, BTC remains an inflationary product since miners mine around 328,000 $BTC yearly until minting all 21M BTCs.
Staking
Ethereum supported staking when it migrated to PoS from PoW and has seen 16 million Ether staked since then. The present staking rewards hover at 5.3% APR (Annualized Percentage Rate). Recent announcements suggested that the ETH network would soon experience another upgrade, Shanghai, which will allow individuals to withdraw staked Ethereum.
Considering this information and Ethereum’s deflationary state, enthusiasts can expect increased real staking yields. Moreover, the Shanghai upgrade would allow users to stake and un-stake their assets at will, potentially welcoming a high participation rate. That would push the overall staked Ethereum higher by about 16 million tokens.
Bitcoin Today (20 January)
The crypto market attempts greener moves after the latest upside wave. For instance, Bitcoin maintains beyond the vital $21K level. While writing these lines, BTC changed hands near $21,095.71, following a 1.56% gain within the previous day. However, sellers remain in the game as the bellwether crypto dropped 0.02% in the previous hour. Time will unravel upcoming possibilities.
