Why is the price of Ethereum difficult to increase (Why is Ethereum so expensive)?

Why is the price of Ethereum difficult to increase?

From 2015 to 2017, the price of Ethereum has been steadily declining. During the bull market, it plummeted due to the rise in coin prices (ETH), but when it fell back, its price fluctuated significantly. Therefore, there are three main reasons why Ethereum has not continued to decline: firstly, the market’s expectations for ETH are insufficient; secondly, the Ethereum network is too centralized to support enough demand. On the other hand, many investors put their money into other platforms for trading in order to earn profits. Why is the price of Ethereum difficult to increase? Let’s analyze it briefly.

First, why are Bitcoin and Ethereum unstable?

Bitcoin has recently been quite resilient and frequently appears in various mainstream media. However, people have also discovered that some altcoins are extremely fragile and are being used to short these assets, making the value of Bitcoin and other cryptocurrencies increasingly difficult to track. Therefore, the risk of Bitcoin still exists, and even some projects may choose to sell their tokens as reserves.

Second, why can’t the price of Ethereum increase rapidly?

1. Ethereum is not fiat currency but a deflationary cryptocurrency, which is not as common as many people imagine. If Bitcoin can really become a form of payment, its price will definitely not be high. On the contrary, over time, the price of Bitcoin will be more easily affected by global markets and continue to rise, making it more uncertain and unstable.

2. Currently, most exchanges support multiple virtual currencies such as BTC, ETH, BCH, etc. However, since they are all based on the ERC-20 protocol, users holding one ETH can participate in buying or selling certain types of virtual goods.

3. Due to the development of DeFi applications and other blockchains, more and more use cases are flowing into this field, especially those that enable more users to use decentralized solutions. Ethereum has become a new target for many developers.

Fourth, why is the price of Ethereum difficult to increase?

First, for Bitcoin, it is still bearish in the short term, and for Ethereum, it may continue to maintain a oscillating trend in the long term. However, from a long-term perspective, there is still a good profit potential.

In addition, although the price of Ethereum fluctuates greatly, it has started to rebound after a short adjustment. For example, recently, the launch of the Ethereum 2.0 test network showed the possibility of further breakthroughs in the price of ETH, but at the same time, another reason is that the price of Ethereum did not follow the overall trend.

In summary:

Why is the price of Ethereum difficult to increase?

First, why is the price of Ethereum not sustainable, the price of Ethereum is naturally immutable. The second important issue is whether the Ethereum ecosystem is thriving and developing.

Why is Ethereum so expensive

Editor’s note: This article is from 8btc ID: bitcoin8btc, author: Kyle, published with permission from the Planet Daily.

Bitcoin is currently one of the most popular cryptocurrencies and was once considered a means of value storage during the 2017 bull market. Now it is at a historical high period-the Ethereum network has reached a speed and cost of thousands of transactions per second. And now, its price is also rising, from the beginning of the year to February of this year, it even soared to over 100,000 US dollars, and continued to rise to a high point of nearly 20 US dollars. Why is the price of ETH so expensive? According to DeBank data, the average price of Ethereum in the past week was about 16,200 US dollars, and after reaching its all-time high in mid-January, these two numbers have respectively dropped by 80% and 75%; at the same time, Bitcoin It has fallen below this record low point since December last year when it reached 40,000 US dollars for the first time, and the decline has reached 40%.

But compared to BTC, Ethereum has higher volatility, so while its token price has been rising significantly in the past few weeks, it has also been climbing. According to data from the analysis website CoinGecko, the current total supply of Ethereum is about 345,000, accounting for over 10% of the global total, but due to recent factors such as the surge in Bitcoin and the launch of Ethereum 2.0, the value of Ethereum has been declining. Although Bitcoin is still one of the most popular cryptocurrencies, it still has a lot of room for growth in the current market environment. If Ethereum is viewed as an investment asset, its price is likely to change. What is Ethereum? Simply put, Ethereum is a cryptocurrency used to pay gas costs or for other purposes. Typically, when you send your Bitcoin to someone else, you receive an address containing transaction fees, and then you can send it to another wallet of the recipient. (Note: “miners” are those who mine with Ethereum, and they can add new features or create new blockchains to the network.) The reason Ethereum can be so expensive is that it not only supports smart contracts, but also allows users to execute decentralized operating systems (DApps) through the platform. Activities on the Ethereum network are mainly driven by transaction processors. With the increasing demand for transactions and faster transaction speeds, the number of participants in the Ethereum network has also increased, including mining companies, exchanges, and other service providers, which provide more efficient transaction paths. For example, the RenVM development team proposed a solution at the end of 2018, which allows developers to build Ethereum-based applications. Ethereum is a completely different virtual machine protocol used to run applications and smart contracts on the blockchain.