background img
Jul 29, 2020
24 Views

The next round of cryptocurrency bull market, Ethereum 2.0, has a strong landing

Written by

Ethereum 2.0, which may ignite the enthusiasm for the bull market of cryptocurrencies, has a strong landing.

Looking back at the super bull market in 2017, the catalyst was the speculative frenzy in the currency circle triggered by Ethereum’s 1CO. Three years later, Ethereum 2.0 hit again.

Why does the launch of Ethereum 2.0 lead to a bull market in digital currencies?

First of all, the PoS staking model is likely to attract a large number of funds into Ethereum 2.0 for staking to earn rewards. This brings the demand for ETH on the one hand, and on the other hand, reduces the circulation. Coupled with the current growth of Defi projects, more and more ETH will need to be locked in smart contracts as collateral.

In addition, ETH is gaining popularity among institutional investors. According to Grayscale’s capital inflows into cryptocurrency fund products in the first quarter, Bitcoin and Ethereum have always been favored by Grayscale.

According to cryptopotato.com, as of April 24, 2020, Grayscale has 13,255,400 shares of the Ethereum Trust Fund, and Grayscale has bought 756239.777 ETH based on 0.09427052 ETH per share.

The latest data shows that the total number of ETH mined from the beginning of 2020 to April 24 is 1,563,245.875, which means that Grayscale bought nearly 50% of all mined ETH in 2020. Grayscale also outlined the growing interest of institutional investors in the report and hinted that the upcoming Ethereum 2.0 may be the reason behind it.

Ethereum 2.0 has also become the best story in 2020, and it is precise because of such benefits that it can promote the continuous development of the digital currency market and become an important underlying driving force for the next bull market.

Bitcoin’s third production halved

Bitcoin production cuts have always been given one of the important conditions for the bull market catalyst, but the effect is not so immediate.

Regarding the experience of Bitcoin’s first two halvings, many people in the industry believe that in addition to the benefits of the halving itself, other factors affect the price of the currency.

For example, the first halving in November 2012 was due to the low Bitcoin price and fluctuations at that time, which easily aroused the curiosity of investors or investment institutions outside the circle. At that time, the low-priced Bitcoin of about $100 did not require much capital. Entering the market can control the market. Once this speculative effect is large enough, it will drive a steady flow of subsequent funds into the market, thus forming a bull market.

When the second halving in July 2016, Bitcoin did not explode that year, but at the end of 2017, it directly soared to nearly $20,000. Behind this skyrocketing, some people think that it is the speculative frenzy triggered by the 1CO of Ethereum. This speculative frenzy attracted a lot of funds from outside the currency circle and broke out.

As foreign funds continue to pursue various 1CO projects, a large amount of funds enters the market, and the price will rise, thus triggering a large bull market.

The premise of these two bull markets is that a lot of funds are required to enter the market. Then after the third Bitcoin halving, what events will attract funds to enter the market?

Traditional financial institutions aggressively enter the crypto market

The black swan incident at the beginning of 2020 allowed countries to start unlimited quantitative easing policies. The consequences are: when quantitative easing has not directly affected consumption power, inflation will accelerate and large-scale money printing will cause currency devaluation. The risk increases.

In order to maintain and increase the value of assets, more companies are entering the crypto market.

Year-to-date 2020 address growth of ≥0.1BTC

On May 8, Tudor Investment founder Paul Tudor Jones stated that he was investing in Bitcoin and allocated about 2% of his investment portfolio to this emerging asset, which is Bitcoin.

In addition, more and more crypto asset companies are entering Wall Street as customers, including JP Morgan, one of the international banking giants. It was reported on May 12 that JP Morgan is currently providing services for crypto exchanges. Its first customers are Coinbase and Gemini.

This heralds what is about to happen, that traditional banks are not only aware of the fact that customers want to access encrypted assets, but also bring further credibility to the industry.

Year-to-date 2020 address growth of ≥0.1BTC

On May 8, Tudor Investment founder Paul Tudor Jones stated that he was investing in Bitcoin and allocated about 2% of his investment portfolio to this emerging asset, which is Bitcoin.

In addition, more and more crypto asset companies are entering Wall Street as customers, including JP Morgan, one of the international banking giants. It was reported on May 12 that JP Morgan is currently providing services for crypto exchanges. Its first customers are Coinbase and Gemini.

This heralds what is about to happen, that traditional banks are not only aware of the fact that customers want to access encrypted assets, but also bring further credibility to the industry.

Article Tags:
Article Categories:
CRYPTO

Leave a Reply

Your email address will not be published. Required fields are marked *