Lower price expectations
Lately, cryptocurrency asset movements have been under pressure from the macro environment. The second-largest cryptocurrency by market capitalization, ETH, has fallen nearly 5% over the past week, falling below the $3,000 mark . ETH has lost more than 40% of its value since hitting an all-time high in November, and many analysts have lowered their price expectations for ETH compared to previous forecasts.
Last October, a Finder.com report predicted that ETH would rise to $5,144 by the end of 2021, however, the current price is well below that forecast. Currently, Finder.com has lowered its price forecast for ETH, predicting a price of $6,500 by the end of 2022, a target price of $10,810 in 2025, and a target price of $26,338 in 2030. “The panel’s price forecast for ETH to 2030 has been significantly downgraded,” the report states. “The outlook for cryptocurrency market price growth is heavily impacted by tightening international regulations and macro financial market declines in early 2022.”
CoinFlip founder Daniel Polotsky is even more pessimistic, arguing that “due to the performance of competitors, it will be difficult for ETH to surpass $4,000 by the end of 2022. It is also important to note that ETH’s current utility depends on layer 2 solutions. successes such as Polygon (MATIC), which will take most of the network value from ETH.” In 2021, Polygon has grown into an integral part of the Ethereum ecosystem, and as MATIC has begun to scale on its own, analysts are concerned It may compete with ETH in the future. Comparing the price performance of the two assets ETH (+62%) and MATIC (+1394%) over the past year, this concern is not unreasonable.
ETH’s high transaction fees have dropped recently. On February 13, fees hit their lowest level since July last year. According to Santiment, the drop in fees is due to ETH’s recent price depreciation, as well as a drop in demand for transactions.
The number of whales on the ETH chain has also dropped significantly, suggesting that large ETH holders may be exiting on a massive scale. Addresses holding more than 1,000 ETH have hit their lowest point since 2018.
More companies will participate in the ETH consensus layer
On the other hand, institutions that are optimistic about ETH are also supporting the development of the ETH network with actions. Canada-based public company Ether Capital has once again added 10,240 ETH (~$30 million) to the beacon chain staking. It is reported that the company currently has a total of 60 million US dollars of assets invested in the Beacon Chain network.
Ether Capital gained media attention in 2021 when it became one of the first public companies to stake millions of dollars on the ETH beacon chain. As part of its financial strategy, the company is determined to support the growth of the network and its Web 3 ecosystem and make it an investment focus. Ether Capital has a portfolio of over 44,061 ETH and plans to allocate at least 30,000 ETH to ETH 2.0 staking, or 65% of its total ETH, suggesting the firm is optimistic about the development of the Ethereum consensus layer.
To achieve this, Ether Capital has partnered with Figment to build and operate its validator infrastructure. Therefore, it is not only an investor in Ethereum’s migration to PoS consensus, but also a direct contributor to the security of the network. Additionally, the company will convert 766 MKR into earnings, which is about $1.9 million. The funds will be used for “general corporate purposes” such as buying shares or increasing their ETH balance. Based on Ether Capital’s ETH and MKR balances and an investment in payments API provider Wyre, it has a market valuation of $166 million.
More recently, Ether Capital CEO Brian Mossoff re-emphasized its commitment to the ETH ecosystem, with the company already staking over 20,000 ETH and with the majority of the firm’s ETH balance set to be staked over the next few months . Ether Capital will be firmly committed to the unique strategy of being an ETH hoarder and providing verification and security to the ETH network.
Brian Mossoff interviewed about Ether Capital’s involvement in ETH staking, crypto adoption, and plans for 2022. When asked if ETH staking would be of interest to other listed companies, he said, “There is still a long way to go for listed companies to hold ETH, but it is foreseeable that we will eventually see more institutional adoption of the asset. Currently, capital The market has a soft spot for BTC. However, innovations such as DeFi and NFTs have gotten attention, and now institutions with young employees are starting to pay attention to ETH, which is a good sign.”
The data shows that the number of ETH pledged on the ETH chain is 9.52 million ETH, the pledge rate is about 8%, and the rate of return is 5% per year. The current beacon chain has more than 294,000 active validators, with a participation rate of 97.44%.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/will-the-reduction-in-the-number-of-ethereum-whales-affect-price-expectations/
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