Bitcoin broke through the stiff resistance at $55,000 while Ethereum has been stabilizing in the $3,500-$3,600 range for the past few days.
The Ethereum price has remained stagnant, however, many experts forecast that the network will experience tremendous growth, even reaching new all-time highs.
This boom in popularity can be attributed to the growing popularity of both the DeFi and NFT industries.
Ethereum’s Demand Is Back
The massive increase in Layer-2 protocol at the end of Q3 this year has boosted the demand for Ethereum block space since the beginning of the final quarter. Ethereum’s transaction fees topped $1 billion in September, and the average transaction was $28.
Frank Holmes, who is the CEO, and CIO of U.S. Global Investors, the second most valuable cryptocurrency is the next coin to explode.
The CEO highlights that Bitcoin’s resurgence is the motive that makes Ethereum bounce back to the game. To support his statement, he also points out that Ethereum follows Bitcoin in a similar pattern to silver following gold.
However, Holmes sees the current protocol – the proof-of-work – as the biggest challenge when it comes to Ethereum mining.
By 2022, Ethereum is expected to move from the current proof-of-work protocol to proof-of-stake but in the meantime, it is unlikely to happen.
With the proof-of-stake, miners will no longer need to mine in an energy-intensive way. Instead, ETH is staked to ensure the safety of the network. Some market watchers have commented this will increase the value of Ethereum, but this is pure speculation.
The desire to receive a steady income from staking and the short payback period, on the other hand, will keep the excitement for the cryptocurrency going. High demand becomes the bullish driver for ETH’s long-term trajectory.
DeFi And NFT Hype
NFTs are back in the headlines. And on the back of significant recovery and DeFi – NFT’s hype, the role of Ethereum is a “much more important backbone for growth in blockchain,” Frank Holmes added.
Although the spot price of Bitcoin has increased recently, the activity of the Bitcoin network has decreased, not only in terms of transaction volume but also in volume.
Ethereum (ETH) currently leads in smart contract capacity and the number of active projects on the network.
The continued growth of Ethereum transactions may be related to the growing popularity of NFTs and the growing use of decentralized finance (DeFi) platforms.
On the other hand, the decrease in Bitcoin network activity can be attributed to the increase in BTC holdings by long-term holders.
Regulatory Action Towards Crypto Growth
In the latest move, the US has reportedly planned to set the executive order in an attempt to tighten the cryptocurrency market against the threat of cybercrime.
The US is considering the possibility of broader surveillance of the cryptocurrency market in response to the growing threat of ransomware and other cybercrime.
Ransomware works by encrypting the victim’s data. Typically, hackers will provide victims with “a key” in return for cryptocurrency payments that can amount to hundreds of thousands or even millions of dollars.
Earlier this month, President Joe Biden said America’s top national security advisers would be meeting online with officials from 30 countries to review plans to deal with the growing threat of the US government. ransomware and other cybercriminals.
The involvement of the US government may make a major impact on the growth of the crypto market in the future. According to the Bank of England, regulatory action is required as cryptocurrencies become more integrated into the financial and banking system.
Some products may be easier to regulate than others. While products that track cryptos can be regulated, actually regulating the tokens themselves isn’t possible.
China has been at that game for years, and ended up with bans instead of functional regulations.
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