Blockchain may be one of the most likely ways to transfer wealth in human history in the near future, and I still believe that 2021 may be the most promising year for ETH, and we may witness the greatest year in the history of cryptocurrency.
In the last two months of 2020, Bitcoin opened an upward pipeline. Unlike Bitcoin, Ethereum’s performance in the last two months of 2020 is not impressive. On the first day of 2021, Ethereum seems to have begun to wake up. Since January 1, 2021, Ethereum has risen by 70%, and on January 10, 2021, it touched the price high of three years ago on January 14, 2018, although it started to pull back after a short touch. , But today, Ethereum looks to be higher than the price before the shock.
The market discussion about cryptocurrency usually revolves around Bitcoin. There are good reasons why Bitcoin can attract the attention of the entire cryptocurrency market. It is the creator of the blockchain, its market value is the first, and it accounts for 70% of the market. The market value of cryptocurrencies... However, even so, Ethereum can still capture the eye in the market. I still believe that Ethereum can attract more spotlights in 2021 and maintain its lead in the market.
1. Expensive Bitcoin makes new investors turn to ETH
The price of Bitcoin has experienced an exponential rise in the last 3 months. At the time of writing, the price of Bitcoin has reached $35,500. This will be good news for long-term investors, but for new entrants to increase market vitality. Game players are not very friendly. Most investors do not have so much money to buy a complete bitcoin. This may make investors feel that they are abandoned by bitcoin. If bitcoin continues to rise, regardless of the new entry Investors are still old players who have not established a Bitcoin position before, and this kind of "abandonment" will increase.
Although the price of ETH has begun to hit the high point three years ago, compared with the price of Bitcoin, ETH appears to be very cost-effective, not to mention that compared to Bitcoin and other cryptocurrencies, ETH is the most decentralized market. As the main smart contract platform running on DeFi protocols and decentralized applications (dApps), so far, no cryptocurrency that claims to be "Ethereum Killer" can be widely recognized and adopted like the ETH platform.
2. Ethereum is about to follow BTC on CME, the investment of traditional investors will increase more possibilities
If you have been paying attention to traditional financial markets. You will find that in the past 12 months, the trading volume of the Chicago Mercantile Exchange (CME) Bitcoin (BTC) futures trading product hit a new high. As CME continues to increase transaction volume, according to data, the average daily transaction volume (ADV) of Bitcoin in December reached 11,179 contracts (equivalent to 55,900 BTC), a year-on-year increase of 114%. At the same time, the price of Bitcoin was also In the previous 3 months, we continued to create history and created new peaks. Founded in 1848, the Chicago Board of Trade is a leading futures and options exchange. In May 2020, it ranked 440th on the 2020 Forbes Global 2000 list.
According to the latest news, on February 8, 2021, the Chicago Mercantile Exchange (CME) officially launched Ethereum futures, and the decision is currently awaiting final review. With the previous successful experience of Bitcoin, the road to ETH's review will also pass with a high probability. Once successfully passed, the traditional financial market has completely opened the door to Ethereum. Investors can invest in Ethereum without actually buying and storing Ethereum. In other words, it is as simple as buying gold on Alipay. Just imagine, if "new money" starts to flow to ETH like Bitcoin through futures, then ETH is bound to be the same as BTC. The investment of traditional investors will continuously push ETH to new heights.
3. The launch of ETH2.0 will attract more investors
ETH2.0 is an upgrade to the current Ethereum. It needs to solve the scalability and cost of Ethereum. ETH2.0 is a PoS chain, which is two different chains from the current Ethereum 1.0 PoW chain, and the two will eventually merge in the future.
There is an "impossible triangle" theory in blockchain networks, that is, decentralization, scalability, and security cannot be met at the same time, which requires a trade-off in network design. For example, Bitcoin satisfies decentralization and security, but it sacrifices scalability. ETH2.0 aims to improve scalability through fragmentation technology, greatly increase the throughput of the blockchain network, and improve the performance of the entire network. The simple idea of sharding is to increase the number of pipelines and allocate business orders to each pipeline, so that all pipelines can work in parallel, and the efficiency will be greatly improved. Similarly, ETH2.0 will enable 64 data shards (the number of subsequent shards may also increase), each shard chain only processes its own transaction information, 64 shard chains run in parallel, which significantly improves the throughput of poor throughput status quo.
The conversion of pow to pos represents a brand new business opportunity. This transformation will change the economic model, resource usage and governance of Ethereum. More importantly, as its scalability, security and decentralization improve, a faster and better platform will be more attractive than before.
4.Defi will provide strong power for ETH
ETH rose strongly in 2017, and the price of Ethereum soared to more than $1,400. In that round of rising, 1co played a vital role. Through Ethereum, tokens can be issued with one click, plus a beautiful The white paper can start financing. This model has opened up ETH's crazy mode. Although the most 1CO projects ended in fragmentation, they did play an important role in that round of upward trend.
And the time comes to 2021. Looking back on 2020, we can see the fierceness of DEFI, which is different from the risk of 1CO. DEFI is a real financial behavior, and DeFi is the abbreviation of Decentralized Finance. Called Open Finance. It actually refers to a decentralized protocol used to build an open financial system, which aims to allow anyone in the world to conduct financial activities anytime, anywhere.
Due to its better scalability and operational compatibility, most of the DEFIs in the market choose the ETH platform. The data shows that the total amount of DeFi locked up on Ethereum has reached 30.5 billion US dollars, and due to the high degree of Ethereum Capacitive, only Ethereum has realized a complete ecosystem of lending, DEX, insurance, and wealth management.
With the advent of ETH2.0, DEFI deployed on the ETH platform will no longer be subject to performance bottlenecks. As a result, the first choice for DEFI in the future market must be ETH2.0, and the DEFI ecosystem on ETH will surely become the market’s core.
Although the violent fluctuations of cryptocurrencies are quite frequent, in the context of the world's continued embrace of blockchain technology and cryptocurrencies, completely ignoring the blockchain will definitely be a wrong absolute. Blockchain may be one of the most likely ways to transfer wealth in human history in the near future, and I still believe that 2021 may be the most promising year for ETH, and we may witness the greatest year in the history of cryptocurrency.