A new bull run has kicked off, with meme coins surging by 100% and daily identification of cryptocurrencies witnessing increases of 20% to 30%. Non-stop airdrops of new tokens are occurring, while Ethereum (ETH) recently surpassed the $4,000 mark.
The surge in Bitcoin’s price above its previous all-time high has sparked discussions within the community regarding ETH’s potential, given its near all-time high price of nearly $5,000, and the prospect of reaching $10,000 in the near future, possibly by 2025. In this blog, we delve into the factors influencing this growth.
The approval of an Ethereum ETF and its potential impact on ETH’s price is a significant consideration. With Bitcoin ETF funds garnering substantial assets, attention turns to when Wall Street might contemplate a similar scenario for Ethereum. Mike Novogratz, CEO of Galaxy Digital, is optimistic that spot ETH ETFs could debut this year, potentially pivotal for Ethereum’s price growth, particularly with the SEC’s decision on VanEck’s spot ETH ETF request due by May 23, which could set a precedent for future funds’ interest.
Many believe that the potential Ethereum ETF’s impact has not yet been fully reflected in ETH’s current price.
The Dencun update, a fusion of the Deneb and Cancun upgrades, promises substantial cost reductions on Ethereum Layer 2 networks. Through Ethereum Improvement Proposal (EIP) 4844’s introduction of “proto-danksharding,” this upgrade targets enhancing Ethereum’s efficiency and scalability, marking the most significant update since April 2023 and paving the way for future network enhancements. The lowered transaction costs on Layer 2 networks offer Ethereum developers new opportunities, further enhancing Ethereum’s value.
Dencun incorporates nine Ethereum Improvement Proposals (EIPs), set to decrease transaction costs on Layer 2 blockchain networks like Arbitrum and Optimism significantly.
The transaction costs are expected to decrease by a factor of ten after the upgrade. This suggests that decentralized exchange token swaps could drop by around 10 and even to 100 times on certain Layer 2 networks.
Beyond reducing transaction costs on the Ethereum mainnet, Dencun holds the potential to unlock new use cases, such as on-chain games, generative art, and artificial intelligence, previously hindered by high transaction costs.
In line with past upgrades, Dencun lays the groundwork for continued scalability. EIP-4844 introduces the “Surge” phase, aligned with Vitalik Buterin’s roadmap, aiming for 100,000 transactions per second.
Post-“Surge” phase, Ethereum shifts focus to the “Scourge” phase, mitigating centralization risks and minimizing MEV risks while rollups become the predominant scaling choice.
Subsequent phases like “Verge” and “Purge” streamline Ethereum’s data verification and code optimization, with the ultimate goal in the “Splurge” phase to bolster the network’s scalability, efficiency, and security.
These upgrades and development phases underscore Ethereum’s commitment to fostering a decentralized, secure, and highly scalable ecosystem to support future decentralized applications and finance.