This question became a lot easier to answer by mid-May, when the price of Ethereum crashed to under $2,000 again, in the aftermath of the Bitcoin meltdown. It is currently sitting at around $2,700, while it waits to see which direction the market goes next.
Should You Buy The Dip?
While ETH is certainly much more affordable than before, it was not that long ago that the world’s second biggest cryptocurrency struggled to break the $2,000 mark. To determine if we should buy ETH right now, we need to look at Ethereum’s growth not only in terms of price, but also in terms of its network and whole ecosystem of products and development, as well as its systemic issues such as congestion, latency and exorbitant transaction fees to get a better assessment of what we should do.
Shift to PoS
Since December 2020, when it began offering its interim 2.0 PoS rewards program for users who stake 32 ETH and more, Ethereum has been on an absolute tear, boosted by the exponential growth in the uptake of DeFi protocols like automated market makers (AMM) such as Uniswap, yield farming platforms like Yearn.Finance and the zeitgeist mania surrounding the NFT market.
As a result, the Ethereum network has become congested and slow, prone to ridiculously expensive gas fees that could cost hundreds of Dollars to interact with smart contracts and causing both users and developers to migrate to rival networks like Binance smart chain and Solana.
However, it is on its way to a Proof of Stake final form and is looking at implementing layer-2 solutions from the likes of Matic. If Bitcoin is any indication, crypto users are a loyal even tribal bunch and for many Ethereum will always be their first love.
Staking Rewards
As more and more ETH are being locked up for staking in joint investment pools by institutions, the available supply of Ethereum should continue to go down, thereby forcing prices on at least exchanges to go up in the short term.
Once Ethereum goes completely proof of stake sometime in 2022 or 2023, the genie will be out of the bottle for good and the super low transaction fees and vast increase in transaction speed should propel the original smart contract network to never-before-seen heights, which may even result in the mythical “flippening”.
