Post Elon Musk’s comments of owning Ethereum (ETH), the world’s second-largest cryptocurrency has surged more than 10% in the last 36 hours. At press time, Ethereum is trading 4.70% up moving above its crucial resistance of $2000.
Although Ethereum has corrected more than 50% from its all-time high, analysts are still positive about its future. Popular crypto analyst Lark Davis explains why he is so optimistic citing multiple bull-case scenarios.
Citing the Ethereum 2.0 upgrade, Davis notes that the so-called “Triple Halving” will be a significant economic event for the asset. Explaining the math behind the prediction, the analyst notes that the daily block rewards paid out to Ethereum (ETH) miners at present are 12,800 ETH. The analyst notes:
“Every day there is 25.6 million dollars a day worth of sell pressure for Ethereum! And because we are in a proof of work system miners are constantly selling, dumping on the market. Why? Because miners run a cash business. We are in a mine and dump economy for ETH”.
Ethereum 2.0 Will Bring a fundamental shift
The analyst also notes that the transition to Ethereum 2.0 will fundamentally change Ethereum forever. The Merger between the two blockchains will put an end to the existing Proof-of-Work (PoW) consensus mechanism while adopting the Proof-of-Stake (PoS).
Davis notes that this will be a big transition from a dump economy to a stake and re-stake economy. The Proof-of-Stake (PoS) consensus mechanism encourages investors to hold more and earn more.
Another major aspect the analyst notes is that the PoS transition will cut down emissions by 90%. Thus, the daily block rewards will reduce to 1280 ETH and inflation will also be one-tenth from the existing 4.3% to 0.43%.
Davis also points out the fee-burning EIP-1559 mechanism which will make ether scarce and help to shoot its price north. All these have been coupled with the surge of the Ethereum blockchain activity due to the rising demand for DeFi and NFTs. With all this, Davis arrives at a perfect formula to take the ETH price to the MOON.
90% supply emission drop coming + shift to stake and HODL economy + fee burning + soaring demand = MOON
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