Ever since Russia invaded Ukraine and started a war, things have been critical for the global financial ecosystem. Everything starting from stocks to cryptocurrencies faced major hits. Among the most affected assets, Bitcoin and Ethereum are key victims. For more than two weeks straight, ETH is laundering near US$2,500, which was prevailing as a major resistance level a couple of months back. However, despite the price drop, experts say that this is the best time to buy Ethereum because a lot of good things and growth is on the radar.
Ethereum is more than just a cryptocurrency. For people using the blockchain ecosystem, it is a global computer for running decentralized applications. ETH is the official digital token that powers the Ethereum network. Although Bitcoin is the foremost cryptocurrency that is seen as a 'store of value', over time, Ethereum has emerged as a major resource for advanced features like NFTs, smart contracts, DApps, etc. In a nutshell, Ethereum is the direct competitor of Bitcoin that is fighting to take over the top spot since its debut in 2015. On yearly growth rate, ETH already outperformed Bitcoin in 2020 and 2021. It is the diamond of the cryptocurrency market that has intrinsic and industrial value. However, all is not well for ETH. Ever since it reached an all-time high in November last year, Ethereum has faced constant falls that pushed the digital token below the US$2,500 resistance level. But experts suggest that ETH will have a great year in 2022 with Ethereum 2.0 and many other updates on the radar.
Ethereum is the second-largest cryptocurrency by market capitalization and the epicenter to smart contracts, DeFi, DApps, etc. Over the past seven years since its inception, ETH has faced many challenges. Although it emerged as a major competitor for Bitcoin initially with advanced features and a better working system, Ethereum competitors like Solana and Polkadot are more capable now. Over time, cryptocurrency investors who hailed the feature seem to have realized the downsides. Developers have noted some key advantages like the high gas fees, slow transaction speed, and hard-to-code nature of ETH.
Who is the biggest benefiter of Ethereum's loss? Solana and Polkadot have emerged as the greatest winners of ETH's loss. The disadvantages in the Ethereum ecosystem have exposed developers to look for 'next ETH'. As a result, they embraced Solana and Polkadot, the direct competitors of Ethereum, as a substitute. Besides, these altcoins are specifically built to address the challenges of Ethereum, making it extremely competitive.
As mentioned above, developers have become familiar with the vulnerabilities of Ethereum, making them choose other networks over it. However, the targeted shift from proof-of-work to proof-of-stake model is expected to make many positive changes. For example, the upgrade is aimed to address the high transaction fees, increase coins burned and improve congestion. The upgraded features in Ethereum 2.0 are expected to increase the demand and lift activity drastically, which will eventually trigger its price.
Experts also say that the move to proof-of-stake will have a positive impact on the cryptocurrency's price and trigger more people to buy Ethereum. The biggest drawback of ETH right now is its gas fees and if the network is willing to reduce it, then investors won't have a problem availing themselves of ETH services.
It is not just Ethereum that is facing the storm from the Russia-Ukraine war. Generally, assets, stocks, tokens, etc are getting the blow on their face from the geopolitical crisis. This week, Ethereum's price dropped below US$2,500 as Russia's invasion of Ukraine has contributed to heightened volatility. Although ETH is trying to make a comeback, it is strongly being pushed against at US$3,000. But the geopolitical impact on cryptocurrencies is not a usual thing. Even if it does, experts say that time will bring digital tokens' value back on track.
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