Is Ethereum a Good Investment in June 2020?
Why is Ethereum going up? Is ETH just riding on the coattails of Bitcoin? Or is recent development progress driving ETH prices higher?
Over the past 7-days, the Ethereum price has been surging on exchanges by as much as 22%. Trading in March at just $88 at one point, Ethereum at the time of writing is trading on Coinbase at $251. However, Ethereum is still down on 2018 all-time highs of $1,400 by 80%. The only question is, will the current ETH rally continue, and if so, what is driving prices upwards?
OMG Plasma Lends ETH a Performance Boost
According to some analysts, Ethereum is likely rallying on exchanges at present, as a result of major ETH usability improvements.
At present, the Ethereum blockchain supports the vast majority of Tether transactions. This has been the case since 2017. However, recently, the number of Tether tokens trading on Tether has grown to over 2.2 billion. This has seen congestion on the blockchain become a major issue. Thankfully, though, all this is now changing.
On June 1st, Tether began using Ethereum’s OMG Network Plasma sidechain to process transactions. In doing so, Ethereum itself has just been given a major performance boost. However, Plasma isn’t the only reason ETH prices are going up.
The Ethereum 2.0 Launch Date Approaches
It is not just new integrations with Plasma that are improving performance on Ethereum. Despite several long delays, Ethereum 2.0 is on track to launch as early as this July. When this happens, many cryptocurrency market analysts expect Ethereum to enter an at least temporary new bull cycle.
What is Ethereum 2.0?
At present, Ethereum is a Proof-of-Work cryptocurrency similar to Bitcoin. This means that every day, miners devote computational resources to process blocks of transactions. In return, miners receive freshly minted ETH in compensation.
In July this year, all this will change. Instead of Ethereum being a mined cryptocurrency, Ethereum will become a Proof-of-Stake digital asset. This will see transactions processed by significant Ethereum stakeholders, not miners.
Ethereum 2.0 Benefits
- When Ethereum 2.0 launches, the Ethereum blockchain will get a major performance boost. In theory, this will see it become possible for ETH to start processing thousands of transactions per second.
- Thanks to new improvements like Sharding and improved Ethereum Virtual Machine capabilities, code and applications built on Ethereum will be able to execute faster, even during high network traffic periods.
- Off-chain scaling solutions like Plasma and Raiden will make it possible for Ethereum to scale to meet the needs of an almost unlimited number of new network users and D’App developers.
Is Ethereum a Good Investment in June 2020?
With so many network and Ethereum feature improvements in the pipeline, Ethereum is definitely a top altcoin to watch as we head into the middle of summer. It is even possible that feature improvements to Ethereum could result in a new altcoin season, as developers race to start making use of Ethereum’s new capabilities.
All that traders and investors need to remember, is that just like with Bitcoin halving events, ETH prices might rise rapidly in advance of the Ethereum 2.0 launch date, but stagnate or fall temporarily shortly after.
This is an opinion by the author and in no way meant to be financial advice.
