Ethereum price: Upswing may be on the cards as ETH continues leaving exchanges

Even if ETH’s foreign exchange reserves go down, ether prices will remain stable … for now.

  • Between January 14th and 15th, ETH reserves on centralized crypto exchanges fell by a whopping 20%.
  • Experts believe that the decline could be due in part to the fact that more and more ethers have accessed various decentralized protocols such as Uniswap.
  • Miners can also aggressively amass ETH as the Ethereum network prepares for the transition to a Proof-of-Stake (PoS) framework.

On Jan. 12, Ether (ETH) saw a massive 32% decline in 24 hours, bringing the value of the leading cryptocurrency to a relative low of $ 910. The slump came shortly after the altcoin was primed for another major uptrend and was just $ 70 from hitting its all-time high of $ 1,350. However, since then, ETH has shown increasing levels of stability and is currently trading around $ 1,200 for more than 72 hours.

Given the increasing perceived stability of ether, it has recently been found that the total volume of ETH on all centralized exchanges has decreased by 27%. The data from the blockchain analysis company CryptoQuant shows that only 8.1 million ETH are currently sitting in the reserves of all these trading platforms.

In this regard, some analysts pointed out that there was a massive 20% drop in ether reserves on all regulated exchanges between January 14 and 15 alone, while well-known data providers such as Glassnode pointed out that ether reserves had not been up since July 2018 more were so low.

To get more clarity on this development, Gaurav Dahake, CEO of Cryptocurrency Exchange Bitbns, pointed out to Finder that one of the main reasons for the decline in the volume of Ether on most centralized exchanges was due to the fact that more and more ETH were withdrawing and transferred to decentralized protocols like Uniswap, where liquidity is tied up in different trading pairs.

Additionally, there is a great likelihood that miners will accumulate the second largest cryptocurrency by total market capitalization, with the possibility that the Ether Network will make its long-awaited move to a Proof-of-Stake (POS) setup sometime this year, which is im Essentially means that mining will only be profitable for the participants if they invest a significant portion of the ETH. On this topic, Sidharth Sogani, CEO of blockchain analytics company Crebaco Inc., highlighted the following:

“The demand for mining is growing, but there is almost no inventory for the most efficient graphics cards in the world, which has nearly doubled GPU costs. When miners get involved in the market, that’s always good. I see ether hit $ 2000 in the next 30 to 45 days. There is also the possibility that POS will soon be launched within the Ether network. This could be another reason miners amassing ETH. “

Is Ethereum’s value proposition more attractive than Bitcoin’s?

Although Bitcoin and Ethereum appear to be two of the main beneficiaries of the industry’s recent bull run, more and more investors are finding that the value proposition of the two offerings is massively different. While Bitcoin is clearly the market OG, its price seems to be determined by the “strict supply and elastic demand” model (with a superimposition of perceived value). On the subject, Sam Tabar, co-founder of Fluidity (inventor of AirSwap) and former Head of Capital Strategy (APAC) at Merrill Lynch, said:

“It’s not unlike gold, but in digital format. This is one of the main reasons BTC has appreciated in value as a hedge against the US dollar like gold used to do. Obviously, BTC is a lot easier to hold than gold. Not many people want to put gold bars under their mattresses or in their pockets to hedge against the increasing worthlessness of the US dollar. “

On the flip side, according to Tabar, Ethereum appears to be like a Swiss jackknife made out of crypto coins that has the potential to serve as a new decentralized computer network that can potentially renew the entire financial system if used in that direction. However, this does not apply to Bitcoin as there are no programmable functions.

And while many investors in traditional finance as well as the digital assets industry tend to routinely group BTC and ETH under the heading of “crypto,” it seems as though over time the programmatic capabilities of Ether (aka “clever” would be contracts’), the two offers will differ greatly from each other, with Tabar emphasizing: “People will recognize that ETH is the smarter one. Once enough crypto investors understand this, the correlation between ETH and BTC will fall apart. You can already see how slowly banking partnerships are taking place within the Ethereum ecosystem. “

Ethereum is on the way up

While Bitcoin hit most of the headlines in terms of institutional adoption a few months ago, banking giant JP Morgan has taken a seat on the board of directors at ConsenSys, Ethereum’s largest software company in the world. This seems to suggest that more and more stakeholders operating within the traditional financial system are realizing that they can use Ethereum to completely rewrite today’s banking setup.

Sogani also believes that a major reason that could keep Ether from breaking out is the fact that ETH’s OTC (over-the-counter) markets haven’t developed much, which is why most of the OTC deal makers have to buy the altcoin on exchanges. Add:

“As soon as they hit the market, prices will go up. I expect the ETH price to rise suddenly by 20-30% over the next few weeks. In my opinion, a stable area is around 1750 USD “

Sogani’s aforementioned ETH price rating is also shared by Tyler Winklevoss, co-founder of the Gemini cryptocurrency exchange, who believes Ether is one of the most “undervalued” cryptos in the market today.

Interested in cryptocurrency? Learn more about the basics in our beginner’s guide to Bitcoin, learn how to protect your crypto, our end-to-end guide on cryptocurrency security, and delve deeper with our simple guide to DeFi.

Disclosure: The author owns a number of cryptocurrencies at the time of writing

Disclaimer: This information should not be interpreted as confirmation of the cryptocurrency or any particular provider, service or offer. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are very volatile and sensitive to secondary activities. Performance is unpredictable and past performance is no guarantee of future performance. Take into account your own circumstances and seek advice before relying on this information. You should also review the nature of a product or service (including its legal status and relevant regulatory requirements) and consult the websites of the relevant regulatory authorities before making a decision. Finder or the author may be involved in the discussed cryptocurrencies.

Image: Getty

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