What Crypto Analysts Are Saying About the Ethereum Hard Fork
"The notion of ethereum becoming a deflationary cryptocurrency in the future is now tangible, and the effects on ethereum’s valuation could be profound," said one analyst.
At press time, ether was trading at $2,802. The world's second-largest cryptocurrency by market capitalization is up more than $300 from its daily lows, with a 4.83% gain over the past 24 hours.
Martin Gaspar, research analyst at CrossTower:
- The apparent success of the upgrade is getting priced in.
- "The notion of ethereum becoming a deflationary cryptocurrency in the future is now tangible, and the effects on ethereum’s valuation could be profound."
Alex Svanevik, co-founder & CEO at Nansen:
- It will take a while, possibly even weeks, to see any real impact from the upgrade.
- Currently, he is focusing on a metric that looks at the percentage of EIP 1559 transactions, which is currently very low.
- "As wallets, bots, etc. start making use of the EIP 1559 features, we will know more about how this upgrade affects Ethereum long term."
Denis Vinokourov, head of research at Synergia Capital:
- "Overall, the reaction is more or less as expected. It is very rarely that ethereum benefits from any immediate upside following such network upgrades, although a bias tends to materialize over time."
- These occasions are typically well documented heading into the event, given the transparent discussions on various forums and conferences, he said.
- That's "unlike, for example, the [Federal Reserve] meeting, where slight nuances with regards to language used may have a more pronounced impact on reaction by different asset classes," Vinokourov said.
Laurent Kssis, managing director of exchange-traded products at 21Shares AG:
- Kssis sees a possibility of a short-term correction as the network stabilizes, before resuming an upward trend.
- He said he can't see a definite trend in the short term, but a relative value trade could be implemented between ether and bitcoin.
- "With [non-fungible tokens] in full swing, we see a consolidation as demand remains strong in the [decentralized finance] segment."
Alexandre Lores, analyst at Quantum Economics:
- Increased scarcity of ether will bring longer-term value to supply/demand factors.
- “Short term, this is another reason to be bullish," Lores said.
- Lores also said that bitcoin is looking bullish on the 15-minute and one-hour candle charts.
- “I believe this is anther supporting factor in the ETH rally; however, in this case it does not appear to be the dominant factor,” he said.
- Normally, bitcoin is the main influencing factor, but in this instance it is merely adding fuel to the “bullish fire," according to Lores.
Tom Salter, digital asset analyst at ByteTree:
- “This is the most extensive upgrade to Ethereum in years. Part of me thinks Ethereum maximalists did not expect it to be implemented. Clearly, hype has a part to play.”
- “Bear in mind this rise has taken [ETH] to a 30-day relative high against BTC. That alone will give this breakaway legs.”
- In terms of what is next, Salter hopes that several debates will be settled in the Ethereum community: whether EIP 1559 will give Ethereum a deflationary supply, and whether fee tips will be enough for "greedy miners."
Rick Bensignor, president of Bensignor Investment Strategies:
- Bensignor attributes ether's rise in price after the London upgrade to a combination of the theoretical bullishness that comes from the "hard fork" (i.e., lower transaction costs along with slightly reduced supply).
- He also said the uptick is because crypto traders tend to trade the news of the day, and "it's not a developed enough market to really know what the long-term fundamentals truly are,” said Bensignor.
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