It’s not a new all-time high, but any good news is one to covet in the crypto winter. Ether, the second-largest cryptocurrency by market value, has risen about 40% in the past seven days, topping $ 1,600 on Monday. This is far from the high of $ 4,800 hit by the crypto last November, but it is the first time Ether has breached this threshold since June 13th.
Ether is particularly hard hit by recession fears gripping the global economy. Last week, before the rally in ether, the cryptocurrency had lost about 70% of its market value since the beginning of the year. It bottomed out on June 19, according to CoinMarketCap, briefly falling to $ 993. As ether is the basis of the non-fungible token market, the values of non-fungible tokens have also fallen over the past month.
At the time of writing, the value of Ether, which stands at $ 1,608, has increased by 34% from the value five days ago. This increase is all the more significant as it follows reports that June saw an inflation rate of 9.1% compared to last year, the highest inflation level since November 1981. The sharp fall in the value of cryptocurrencies was caused by the rise in interest rates, carried out by a Federal Reserve eager to fight inflation. As the price of money rose, investors fled speculative assets; crypto was hit hard, but so were technology stocks.
Crypto investors hope that Ether’s rally in the face of such alarming inflation is a sign that we have already seen the coldest days of the crypto winter. Bitcoin has risen by over 10% in the last few days and stands at $ 22,300 at the time of writing.
The more pronounced recovery in Ether is attributed to news that the Ethereum merger, which will make the blockchain almost carbon neutral, is tentatively scheduled for completion on 19 September. This date was set during a recent conference call between Ethereum developers, although it was noted that the date could be changed.
The Ethereum merger will see the blockchain transition from its current proof-of-work system to proof-of-stake. What does this cryptographic nonsense mean? In summary, solving cryptographic puzzles, which are the part that consumes electricity, will no longer be part of the blockchain mining process. As a result, it is estimated that Ethereum’s CO2 footprint will decrease by 99.65%. You can find a full explanation of the Ethereum merger here.
Ethereum’s transition to proof of effort has been underway since before the blockchain was even created, and has been delayed several times. The fact that developers are confident enough to set a specific date – September 19 – for wider periods such as “during 2022” has, of course, thrilled investors.
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