Tag: Ethereum ETH

After the approval of Bitcoin ETFs, Bloomberg expects Ethereum ETFs to follow. How has the market reacted?

These are festive days for crypto enthusiasts, marked by much positive news. Following the approval of Bitcoin ETFs yesterday evening, many now anticipate Ethereum ETFs. This may be why its price has surged in recent hours.

What will happen in the coming days? Will the anticipated spot ETFs on Ethereum in May arrive? Find out all the latest news on this topic in this article!

Ethereum ETFs: Are They Coming Soon?

According to Eric Balchunas, one of the world’s leading ETF experts, there’s a 70% chance that Ethereum ETFs will arrive. This may be why the SEC’s announcement initially positively impacted Ethereum’s price more than BTC. The most capitalised crypto in the market had already partly priced in the event, although in the last hours, it’s recording a +9% increase compared to yesterday.

In any case, the long-term outlook for the entire market is optimistic; the bear market is officially over, and large investment funds are ready to inject significant amounts of money to offer their “brand new” financial instruments.

The first helpful deadline for Ethereum ETFs, which could grant another victory to the crypto world, is May 23rd. We will see if the SEC and its chairman, Gary Gensler, will set aside their reservations about the crypto created by Vitalik Buterin.

The Impact on Charts of ETF Approval

Those expecting a tumultuous price movement immediately after the ETF approval might be disappointed; Bitcoin’s value in the hours following the announcement remained between $44,500 and $47,000. It’s probably because the whole world expected an affirmative response from the SEC. The situation changed after trading on the ETFs began, which recorded more than 2 billion in volumes in a few minutes. Bitcoin has reached nearly $49,000 and now seems intent on reaching the crucial level of $50,000.

However, Ethereum’s rally started earlier. Probably thanks to the words of Bloomberg analyst Eric Balchunas and other commentators on the Ethereum ETFs. The crypto broke through the $2,400 support and reached $2,600 overnight.

The current scenario in which Bitcoin’s price action is placed could further improve thanks to the entry of investment funds. According to estimates by Chartered Bank, BlackRock, VanEck, and Microstrategy, from 40 to 100 billion in the next four years.

The fact that Bitcoin’s price didn’t react super explosively to the announcement could also be an opportunity for retailers, especially those with a strategy to protect themselves from volatility. Our strategy is recurring purchases involving tiny, regular purchases over time; try it in the Moneybox section of our app!

One question remains: when did the trading of ETFs officially begin? These financial instruments are available on three exchanges: The New York Stock Exchange (NYSE), NASDAQ, and the Chicago Board Options Exchange (CBOE).

Trading on the most famous, BlackRock’s iShares Bitcoin Trust listed on NASDAQ, began a few hours ago, while for the Galaxy Bitcoin ETF by Invesco, available on the CBOE, it was already possible to set purchase orders from last night. The volume counter generated by these financial instruments has gone crazy; at the time of writing, more than 2 billion dollars in spot ETFs on Bitcoin have already been traded.

These are all the latest essential news on ETFs on Ethereum and Bitcoin. Continue following our blog so you do not miss any updates.

Buy ETH on Young Platform

Buy now

Ethereum: what will happen after the Shanghai update?

We are very close to the activation of Ethereum‘s new update, Shanghai. This will allow users to withdraw ETHs they had locked in staking from 2020. That year marked the beginning of Ethereum becoming a Proof-of-Stake, thanks to the emergence of Beacon Chains, a parallel network managed by the new consensus mechanism. It was the developers who chose to block withdrawals for this long period of time. The reason? To ensure maximum security of the blockchain that could have been in trouble due to mass withdrawals. 

After the Beacon Chain came The Merge update, which was activated on 15 September 2022. On that occasion, the merger of the parent blockchain to the Beacon Chain took place, the union into a single blockchain managed by a Proof-of-Stake consensus mechanism. Now all eyes in the crypto world are once again on Ethereum because of the Shanghai update. Everything you need to know is in this article! What impact could this have on the price of ETH?

Ethereum Shanghai: what is the update for? What happens next?

The purpose of the Shanghai update is very simple and clear: to enable withdrawals for those who have staked their ETH so far. 

After activation, those who participated in Ethereum’s consensus mechanism by staking can decide whether to leave their ETHs where they are. Or whether to redeem them with the ‘unstake‘ function. In this case, it is not possible to choose an amount of crypto to unstake, the entire amount originally staked will be returned. 

With the activation of the Shanghai update, all users, both those who decide to redeem their crypto and those who continue with staking, will receive the rewards they have accumulated through the validation of transactions on the blockchain. The rewards will be sent automatically to users’ wallets if they have provided their withdrawal address. 

For those who have staked through providers, and not directly on Ethereum, precise instructions on how the unstake will be handled have not yet been communicated.  

Shanghai Activation Date

The date on which Ethereum’s Shanghai update will be activated has not yet been announced. What is known, however, is the day on which the last testbed will take place: 14 March on the Goerli testnet; during the previous tests, which took place in February on Zhejiang and Sepolia, everything went smoothly. The mechanism regulating the activation of Shanghai is described in the ‘Ethereum Improvement Proposal (EIP -4895)’, in which all the functions that will be inserted or changed within the smart contract that regulates staking are set out. 

How will Shanghai affect the price of Ethereum?

The Shanghai update is a key turning point in Ethereum’s roadmap and therefore could have an impact on its price. Although it is impossible to predict with certainty what will happen, one can speculate. Here are the factors that could cause ETH’s price to fall and those that could lead to a pump.

Why could the price of Ethereum collapse?

The update could cause increased selling pressure and consequently a drop in price. Users could withdraw Ethereum en masse and sell it on the market together with the Ethereum distributed as a reward. If this were to occur, we could see a domino effect that would cause the price of ETH to collapse.

Will the price of Ethereum rally after Shanghai?

Looking at the on-chain data, there are those who argue that the price of Ethereum will rise. In particular, the value to watch is the amount of ETH currently blocked in the staking smart contract.

To date, there are about 17 million Ethereum staked, which corresponds to less than 20% of the circulating supply of about 120 million. This figure is much lower than on other Proof-of-Stake blockchains, where the percentage of staked cryptos is around 40% (on Solana and Cardano it is even higher than 70%).

At the moment, not many users have locked their ETH in staking, the main reason being that their crypto is tied up for long periods of time. After Shanghai the situation might change, we will be able to withdraw and deposit freely. In this case, we could see the number of staked ETH increase and consequently see a reduction in selling pressure on Ether and thus an increase in price. 

It is important to note that a large percentage of the ETHs staked were deposited by users more than a year ago, and the average purchase price of these cryptos is over $2,000. To date, users staking Ethereum who are in profit are only 16% while the remaining 84% are in loss. Therefore, to cause a decrease in the price of Ethereum, users would have to sell their Ether at a loss, a hypothesis that seems remote. Indeed, it is assumed that those who have chosen to staking their cryptos without knowing when they will be able to unlock them, strongly believe in Vitalik Buterin‘s project.

The future of dapps for staking

Those who will definitely be affected by the Shanghai update are the dapps that offer staking and yield farming services on Ethereum. These include liquid staking platforms that are used by those who only want to stake small amounts of Ether. The possible consequences for these types of services are mainly twofold.

With the possibility of depositing and withdrawing ETH at any time given by the Shanghai update, these dapps could develop new functionalities. New DeFi projects will probably also emerge to explore all opportunities to maximise rewards. 

Moreover, there are those who see Shanghai as the next standard of basic staking returns for the entire crypto world. These dapps will thus have to compete directly with Ethereum, as well as with their own competitors, and offer rewards more profitable than those guaranteed by the blockchain created by Vitalik Buterin.

In short, Shanghai will start a new cycle of innovation for the Ethereum network that could affect a huge number of projects and hundreds of thousands of users in the crypto world. 
But Ethereum’s renewal does not end with the Shanghai update. The developers are always working to improve the blockchain. On the horizon are Sharding and then The Surge, The Verge, The Purge and The Splurge updates!

Buy ETH on Young Platform

Buy now

Ethereum Classic, Ethereum Proof-of-Work and Ethereum Fair. Everything you didn’t know about the 3 main Ethereum hard forks after The Merge!

On the 25th of September 2022, The Merge update that changed the consensus mechanism of the Ethereum blockchain was successfully activated. The Ethereum network went from Proof-of-Work to Proof-of-Stake without a hitch. For users,The Merge did not bring significant changes, but the same wasn’t true for miners. In the previous version of the blockchain, miners were in charge of validating transactions and consequently blocks on the blockchain, thus earning ETH rewards for each validated block. Therefore, many of them had to move to other blockchains out of necessity ; some of them already existed, others were specially created as hard forks of the main Ethereum blockchain. A hard fork, in cryptocurrency jargon, is when a project is updated in such a way that it is incompatible with the previous version, giving rise to something new. Let’s learn about the 3 main hard forks after The Merge: ETHW, ETC and ETHF.

The most classic of hard forks, Ethereum Classic

Ethereum Classic is perhaps the most famous hard fork in crypto history. ETC was born as a result of a hack on Ethereum’s DAO in July 2016. The hack targeted was an early form of a DAO (Decentralised Autonomous Organisation), a type of organisation that is very popular nowadays in the Web3 world. It allows users who own the crypto of an ecosystem to actively participate in the initiatives and politics of a project.

Ethereum’s The DAO was supposed to be a kind of Venture Capital, with the aim of financing projects within Web3, based on users’ Ether votes from the community. In the days immediately following its launch, the DAO managed to raise $150 million in ETH from more than 11,000 different users. However, in July 2016, one or more hackers breached The DAO’s smart contract. They managed to steal 3.6 million Ethereum, about 14% of the total supply at that time. Following this breach of the Ethereum blockchain, the community was called upon to take a vote on the future of the network. The solution that most people agreed on was the creation of a hard fork.

The main Ethereum blockchain became the Ethereum Classic blockchain, while the new fork that came about as a result of the hard fork became the Ethereum network we all know. But what does Ethereum Classic have to do with The Merge update? ETC is the best-known hard fork of the Ethereum blockchain and has been active since 2016. Although it has been the victim of a few attacks in the past, it continues to resist and process transactions without any particular problems. Precisely for this reason, a large number of miners, left ‘unemployed’ after The Merge, decided to use their computational power to validate ETC transactions instead.

The hashrate of the Ethereum Classic blockchain went from about 50 trillion hash functions per second (Th/s) to about 150 trillion today. It peaked on the day of The Merge, with a hash rate of 300 Th/s. The term indicates the total performance of the network, specifically the amount of hashing functions executed in one second. The increase in hashing functions that occurred simultaneously with the activation of The Merge update shows the amount of miners that migrated from Ethereum to Ethereum Classic.

The resilience of miners, Ethereum Proof-of-Work is born

ETHW was the main Ethereum hard fork after The Merge. Some Ethereum miners decided to copy Ethereum’s Proof-of-Work blockchain and thus create ETHW. The ETHW crypto was distributed to all those who owned Ethereum on both decentralised wallets and exchanges via a snapshot. The latter makes it possible to see the amount of crypto and the addresses that owned that amount at a given time.

Despite the great popularity of this crypto in the days immediately preceding The Merge, the launch was not the best. ETHW’s network suffered various problems allegedly caused by a hack that now seems to have been resolved. In the hours immediately following the launch, ETHW was subject to very high volatility. In fact, it peaked at $50 and then fell back to around $10 in the following hours.

The future direction of ETHW is still uncertain. The project’s white paper, a document in which the main information of a blockchain protocol and goals for the future are usually found, as of today consists of ten pages. The first five pages are devoted exclusively to the title of the whitepaper ‘The Original Ethereum Blockchain powered by Proof of Work’ in English and Chinese, the remaining five have the words ‘these pages have been left intentionally blank’. So the whitepaper is not very constructive. We will see whether ETHW plans to design something for the future or whether it will remain only the ‘second home’ of the now former Ethereum miners.

Ethereum’s third hard fork after The Merge: Ethereum Fair

The third Ethereum hard fork after The Merge is Ethereum Fair, which was created on the 15th of September 2022. The ETHF crypto, at first named ETF, was however not distributed to Ether holders, but to those who owned Bitcoin, Dogecoin and Ethereum Classic. ETHF, however, does not seem to have won over the miners, and the market in general. The crypto was launched at a starting price of about $15 and in a fortnight has lost more than 70 per cent of its value.

Buy ETH on Young Platform

Buy now

The update that will change Ethereum and crypto forever is coming. Find out 5 things you didn’t know about The Merge!

‘The Merge’ refers to the set of updates that will lead the Ethereum blockchain to change its consensus mechanism from Proof-of-Work to Proof-of-Stake. In the crypto world, this has been the talk of the town for months. The Ethereum update is so important that ‘The Merge’ has become a commonly used term to indicate the final activation of the update and more generally the passage to the 2.0 version of Ethereum.

So, what will change with Ethereum 2.0? Transactions will be faster, cheaper and more green. The network will be more decentralised and secure, which will make the Ethereum blockchain more scalable and energy efficient. However, The Merge will not only impact Vitalik Buterin‘s blockchain, the upgrade will also change the crypto world forever. Ethereum is the blockchain on which the main Decentralised Finance protocols are built and in which the world of NFTs is developed. To learn more about the more technical aspects of The Merge, we refer you to Academy’s article on Ethereum 2.0. However, read on to discover 5 things you didn’t know about The Merge!

1.   Why is the Ethereum update called The Merge?

This Ethereum update is called ‘The Merge’ because it consists of the merging of two chains into one. With the update, Ethereum’s Beacon Chain and mainnet will be merged together. The former is the Proof-of-Stake network that has been active since 2020 and used as a ‘Consensus’ layer, but not yet for processing transactions. The mainnet, on the other hand, is the only ‘Execution’ layer of the blockchain on which miners will work until The Merge. With the completion of the upgrade, these two chains will be merged together to improve the performance of Ethereum.

2.   Why is the release date of The Merge changing?

The final phase and activation of the update was planned for September 2022. For a long time no official date for the release of The Merge was communicated. In the past months, the date has been postponed more than once. Even when September was identified as a possible date, the Ethereum developers only hinted at a broad activation period, namely between the 10th and the 20th of September. On the 6th September, Vitalik Buterin narrowed it down to between the 13th and 15th of the month. But why is the exact release date of The Merge not known? Ethereum’s developers did not schedule the update based on the calendar, and thus on a time parameter, but by referring to the Total Terminal Difficulty (TTD). The TTD is the value reached at which the Proof-of-Stake update will be released. It can be understood as similar to the score obtained in order to pass a level in a video game. The Merge will only be completed when the TTD of the value 58750000000000000 is reached. The TTD is the parameter that indicates the level of difficulty that miners have to face to validate the last block in Ethereum’s Proof-of-Work. This value depends on many factors and it is therefore not possible to establish with certainty when the network will reach that value. This is why the date of The Merge is constantly changing.

3.   Beyond Buterin, here is the team of The Merge

Among the thousands of programmers who keep the Ethereum protocol going, you may not know that 119 experts are working on The Merge. Together with this group, some prominent personalities from the crypto world have also joined. From the Ethereum Foundation, researchers Danny Ryan and Justin Drake have contributed directly to The Merge project. The former has been working on The Merge since 2017 (fun fact: The Merge and the move to PoS had already been suggested in 2015, shortly after the birth of Ethereum), in relation to issues such as scalability, sustainability and security. Drake, on the other hand, had a coordination and public relations role.

Vitalik Buterin, of course, also contributed to The Merge update as the mastermind behind the new understanding of Ethereum and as a populariser with the general public. We can credit Buterin for the design philosophy of the new consensus mechanism. Another key figure is Tim Beiko who heads the team of developers. Beiko became the main spokesperson on social media for the development team and managed the many steps necessary for The Merge. Among all the people working on The Merge, we should also mention Mikhail Kalinin of ConsenSys, a software development company that collaborates with Ethereum. They established the details of the Beacon Chain and, according to Beiko, Kalinin is one of those who ‘literally built and steered the ship’. Kalinin called his experience at Ethereum ‘an example of true diversification and decentralisation of work on a research and development project’.

4.   Will there be a new Ethereum 2.0 coin?

As the completion of The Merge approaches, many have wondered whether Ethereum 2.0, the new version of the Proof-of-Stake blockchain, will have a new coin. And again, what will happen to the existing ETHs in our wallets? To answer this question, you have to consider the two possible scenarios following the activation of the update. After The Merge there could be a hard fork of the blockchain in which Ethereum would split into two different chains, one with the consensus mechanism it has always had (PoW) and another that relies instead on staking to validate transactions. In this case, a new coin would be created accordingly, which is currently referred to as ‘ETHPOW’. The chain with the PoS consensus mechanism will retain Ether (ETH) as its native coin, and the PoW chain will instead continue mining ETHPOW. The PoW chain will only remain in existence as long as miners continue to use and support it.

Should a new cryptocurrency actually be created, it will be distributed via airdrop in a 1:1 ratio. Basically your ETH holdings will not change because of this. To prepare for The Merge on Young Platform, read the dedicated announcement.

5.   Sustainable NFTs in the spotlight

Among the 5 things you might not know about The Merge is the green revolution in the NFT world. Let’s consider that most non-fungible tokens are built on Ethereum. Following The Merge, there will be a drastic reduction in the environmental impact of NFT production and transactions. This is because the consensus mechanism that enables Ethereum activity will no longer rely on the computing power of the miners but on the mechanism of staking. In other words, all the electricity used to power the mining hardware will no longer be needed. All blockchain-related activities will be more energy sustainable. 

One of the main criticisms levelled at NFTs concerns the energy required for their ‘minting’, i.e. the process by which digital assets are created. Concerns about the pollution produced by non-fungible tokens have intensified, especially in the current context of an environmental and energy crisis. With greener NFTs, the sector could attract new enthusiasts and experience a creative rally. Creators and new projects will be able to indulge in creating art on the blockchain, no longer intimidated by the environmental footprint.

Buy ETH on Young Platform

Buy now