The recent bull signal in the crypto market can be linked with the news when developers announced the perpetual date for the Ethereum merge upgrade. According to Coingecko after the announcement Ether spiked up above $1500.
Ethereum, the second largest cryptocurrency by market capitalization, will be transitioning from the proof of work to the proof of stake consensus system, with a lot of utility that seems to excite the entire crypto community.
Ethereum in the Proof of Work
Ethereum in the proof of work concept involves miners using high electricity, mining rigs, a large number of computers, and extras to solve heavy mathematical puzzles validating transactions in the Ethereum blockchain.
By doing this, they help sign transactions and keep the entire system running while they get a reward in the native token ETHER for every transaction they validate.
Ethereum in the Proof of Stake
With the transition from Proof of Work to Proof of Stake, miners will not need a high amount of electricity, mining rigs, or a large amount of computers to solve heavy math problems to validate transactions. Rather, they will stake a certain amount of Ether to become a validator, and then continue to get rewards.
This new system Ethereum is about to merge to is being used by other cryptocurrencies like Cardano and Algorand.
The transition will help reduce the high electricity needed to mine Ethereum, thus making the mining process eco-friendly, and also the cost of buying mining rigs, and a lot of computers will not be needed anymore.
It is assumed that the transition will boost the Ethereum ecosystem by 90%, and this is why every cryptocurrency maximalist is excited and bullish.
Ethereum Merge and the Price Prediction of Ether
Since miners will no longer have to compete with each other as in PoW and consume a lot of electricity just to confirm transactions in the Blockchain to earn ETH as a reward. This means that more validators of ETH will be on the rise.
More validators equals more investors because they have to stake a certain amount of Ether, thus reducing the supply, increasing the demand, and increasing the total value locked.
In his newsletter on Friday, Lucas Outumuro, head of research at blockchain analytic firm IntoTheBlock, mentioned that addresses holding over 1% of the ETH in circulation have increased their position.
Ethereum was launched in July 2015, and it hit above $1 in the first week of January 2016, and it has gone as high as $4,800 before the recent bear market. Well, with the latest development ongoing, speculators are expecting Ethereum to set a new all-time high record.