There are periods when powerful altcoins begin to outpace the first cryptocurrency in terms of growth rates. And it seems that we are on the verge of one of those periods now. This opens up opportunities for investors.
Recently, the Ethereum blockchain underwent the largest update since the transition to the PoS mechanism - Pectra. This update is backed by a whole range of important changes.
Improvements in scalability (EIP-7691) have increased block throughput, which is beneficial for L2 solutions such as zkSync, Arbitrum, Polygon, and Optimism… This reduces fees and speeds up the process; currently, the average fee in the Ethereum network has decreased to $0.41.
Smart accounts (EIP-7702). Now ordinary crypto wallets can function as smart contracts, allowing fees to be paid not only in ETH but also in other cryptocurrencies. Multiple transactions can be combined into one simultaneously.
Increasing the staking limit through EIP-7251. The maximum validator balance has been increased from 32 to 2048 ETH, simplifying management for large holders and reducing the load on the network.
EIP-7002 allows for managing withdrawals from staking through smart contracts. An indispensable tool for staking providers and decentralized applications.
The activation time for validators has been shortened through EIP-6110. Now the waiting time for new validators has been reduced from approximately 9 hours to 13 minutes, speeding up the staking process and reducing complexity for developers.
Other technical improvements in cryptography, increased transparency, and stability of fee calculation.
And now let's return to the recent past. In the first decade of April, the SEC approved options for Ethereum ETFs from BlackRock, Bitwise, and Grayscale, the Pectra update took place on May 7, and on May 9, BlackRock met with the SEC crypto group. The topics for discussion at that time included staking, tokenization, ETF approval standards, and ETF options.
Thus, we understand that everything is heading towards soon being available Ethereum ETFs with staking (BlackRock practically does not refuse). The Pectra update improves staking conditions for institutional players, paving the way for the approval of such ETFs, which are already completely different conditions. This is a bet on the future of web3 with dividends higher than those in the defensive sectors of the S&P 500.
This is precisely where the rally of Ethereum and its ecosystem is currently happening, with major players already in the game. In May, ETH rose against BTC by 30% (at the time of writing). Most likely, a local bottom was marked, after which the quotes will strive for the arithmetic average ratio between ETH and BTC, which is equal to 0.049, twice as high as current figures. If the price of Bitcoin does not change by then, Ethereum should be worth $5,000 per token. However, this scenario is unlikely, and if the upward dynamics of the cryptocurrency market continues, many analysts predict that BTC will reach $200,000 per coin. Then, upon reaching the arithmetic average ratio of ETH/BTC 0.049, the price of the first altcoin will reach $10,000.
If we analyze the volume profile, the largest trading volumes in this pair are concentrated in the area of 0.07, and if Ethereum can reach these levels during the rise of BTC to $200,000, then the second cryptocurrency should be worth $14,000 against the dollar.