Ethereum supporters are thrilled about the network’s future. Many expect that it will skyrocket this year, outperforming even Bitcoin.
The occurrence, known colloquially as the flippening, has sparked speculation among important people in the bitcoin currency and investment field. Nathan Cox, the chief investment officer of Two Prime, a crypto investment management firm, believes that in the long run, Ethereum will outperform Bitcoin as more people learn about and use the network. In June, he told Forbes news that “Ethereum’s utility alone will transcend anything else.”
Nigel Green, CEO and Founder of the deVere Group, which manages over $10 billion in assets, expressed a similar attitude to Cox. Speaking to City A.M. earlier this month, the acclaimed analyst stated that Ethereum has outperformed Bitcoin and is likely to surpass it by the end of 2021. He attributes this to Ethereum’s prominence as the de facto framework for the development of decentralized apps (DApps), the anticipated PoS migration, and the real-world utility of Ether — Ethereum’s native currency.
When the underlying facts are considered, it does appear that Ether is actually poised to take off, as indicated by Ethereum fan and analyst, “CroissantETH.” The analyst has predicted that Ethereum will become a trillion-dollar industry.
When it comes to the basics that make Ethereum shine, smart contracts and DeFi spring to mind. Smart contracts are simple programs that run on the Ethereum blockchain and automatically execute particular instructions when certain criteria are satisfied. They are responsible for powering Ethereum’s functions. So far, their employment in DeFi platforms has resulted in an explosion in network adoption.
The market performance of Ethereum demonstrates that smart contracts are of great interest to investors and engineers. According to data, smart contracts hold more than 26% of all Ether in circulation. Combined with the approximately 5.5 percent of Ether now staked in anticipation of ETH 2.0 and the amount of Ether burned by EIP – 1559, the currency’s value may rise owing to greater scarcity.
Furthermore, DeFi, a blockchain-based type of finance that completely eliminates intermediaries, has seen tremendous growth on the network. What began the year with $16 billion in total value locked (TVL) has grown to more over $85 billion in TVL across Ethereum-based DeFi platforms. This has been accompanied by an increase in the number of users.
Other reasons that have contributed to this year’s exceptional success include NFTs, an active development community on the network, reducing supply on exchanges, and network use. The network already settles more transactions than Bitcoin and is likely to expand the gap even further when it upgrades to ETH 2.0, which offers certain scalability capabilities.