Analyst Predicts Ethereum 2.0 Staking Will Trigger a Bull Run

Published at: April 22, 2020

With the first phase of Ethereum 2.0 due to launch within months, some analysts and experts believe it could trigger a major bull run and transform finance as we know it. 

Adam Cochran, a partner at MetaCartel Ventures DAO and strategy developer at DuckDuckGo, has laid out several arguments for why ETH 2.0 “could prove to be the largest economic shift in society” in a blog post.

While that may wishful thinking, he’s on firmer ground when he suggests that staking could drive an Ether supply shock. Cochran believes that dependable staking rewards of 3-5 percent will attract capital from large investors until around 30% of the total supply is locked up. ETH’s forthcoming burn mechanism will contribute to the diminishing supply on markets. 

Easy fiat on-ramps amplify retail FOMO

Cochran theorises this supply shock will create fear-of-missing-out (FOMO) buying among retail investors who are not interested in technical analysis and “just want in.” 

Unlike the 2017 bull run where getting fiat into an exchange was a major headache, the FOMO could be amplified because it’s now significantly easier for newcomers to buy crypto with fiat on exchanges like Binance:

“With no stop-gap this time around, that means these users can all FOMO at the same time. All it takes is one crazy MSNBC headline about Ethereum growth to remind them about their Coinbase account, and the retail investors create a flurry.”

Price aside, Eth 2.0 could transform finance

Speaking to Cointelegraph, Alex Batlin, the founder and CEO of cryptocurrency custody platform Trustology, argued that the impact of ETH 2.0 will extend far beyond price fluctuations.

Batlin believes that ETH 2.0 will offer the scalability required to support mainstream adoption of decentralized finance protocols.

“For DeFi to really work, we need to get from twenty to one thousand to maybe a couple of thousand transactions per minute, and then we start to get really serious. And ETH 2.0 is getting there. If you look at the specs, it's pretty exciting.”

If ETH 2.0 continues on its current trajectory, Batlin believes that DeFi could scale to eventually become “the predominant mechanism by which we do finance.”

Whales appear to be accumulating

Whales appear to agree that ETH 2.0 could comprise a major bull catalyst, with trade volumes surging to record levels on several occasions over the past 12 months. The price is currently up 25% on 30 days ago, though it remains about $100 below its year-to-date high. 

ETH/USD: Coin360

While ETH 2.0 is slated to see initial deployment this year, Ethereum co-founder Vitalik Buterin has laid out a multi-year plan for its complete deployment. So the major bull run and transformation of global finance might still take a little while.

Tags
Ethereum
Business
Defi
Related Posts
The battle of banks vs. DeFi is a win for individual crypto investors
The state of banking and finance today presents a complex labyrinth that even seasoned bankers struggle to navigate. Despite appearances, there is a method to this madness. As Nobel Prize winners like Muhammad Yunus and Joseph Stiglitz have cautioned in the past: central banking, in particular, has morphed to keep the status quo in check. Or, in the words of Mike Maloney, an expert on monetary history and economics: It is “the biggest scam in the history of mankind.” Maloney reasons that giving a small group of unelected individuals the keys to the monetary printing press will undoubtedly rot away …
Decentralization / Dec. 19, 2021
Ethereum white paper predicted DeFi but missed NFTs: Vitalik Buterin
Rounding up the last decade, Ethereum co-founder Vitalik Buterin revisited his predictions made over the years, showcasing a knack for being right about abstract ideas than on-production software development issues. Buterin started the Twitter thread by addressing his article dated Jul. 23, 2013 in which he highlighted Bitcoin's (BTC) key benefits — internationality and censorship resistance. Buterin foresaw Bitcoin’s potential in protecting the citizens’ buying power in countries such as Iran, Argentina, China and Africa. However, Buterin also noticed a rise in stablecoin adoption as he saw Argentinian businesses operating in Tether (USDT). He backed up his decade-old ideas around …
Adoption / Jan. 2, 2022
How long will the crypto bear market last? Raoul Pal's macro analysis
Macro investor Raoul Pal is convinced that the current crypto bear market will end only once the Fed eases its hawkish monetary policy by halting interest rate hikes. That could happen in the next couple of months, according to Pal's predictions. “The Fed are unlikely to raise rates as far and as fast as people expect. My guess is they probably stop raising rates sometime in the summer and that will be it,” he said in an exclusive interview with Cointelegraph. Pal sees the combination of high interest rates and fear of an upcoming recession as the main macro factors …
Adoption / May 12, 2022
Crisis in crypto lending shines light on industry vulnerabilities
The crypto market has entered a bearish phase as prices of major cryptocurrencies have fallen to a four-year low. The current downturn in the crypto market has driven several crypto firms to go out of business, while many have made severe job cuts to remain afloat. The crypto market crisis began with the Terra debacle that saw $40 billion in investors’ money vanish from the market. At the time, the crypto market showed good resistance against such a massive collapse. However, the after-effects of the collapse had a greater impact on the crypto market, especially crypto lending firms, which many …
Ethereum / June 23, 2022
The future of smart contract adoption for enterprises
Decentralized finance (DeFi) markets may have cooled down over the past year, but the technology powering these applications continues to advance. In particular, smart contract platforms that enable transactions to take place across DeFi applications are maturing to meet enterprise requirements. While it’s notable that enterprises have previously shown interest in DeFi use cases, smart contract limitations have hampered adoption. A report published by Grayscale Research in March puts this in perspective, noting that “Despite handling millions of transactions per day, smart contract platforms in their current state would be incapable of handling even 10% of the worlds’ internet traffic.” …
Decentralization / Dec. 3, 2022