What to expect from Bitcoin and Ethereum?

What to expect from Bitcoin and Ethereum?

Many cryptocurrency investors are growing concerned about the ongoing bear market and how difficult Bitcoin is trying to reverse the situation. However, those who have been working in this business for many years are used to such events.

According to Coinmarketrate.com, this is not the first cycle of decline that the cryptocurrency market is facing, and certainly not the last. Therefore, it is very likely that this crypto winter will end soon and the market will recover its value.

Bitcoin has gone through equally difficult times in the past, and many investors seem to forget about it, or perhaps they are too new to the sector to realize it. Thus, in December 2017, after reaching $17,000, Bitcoin lost almost 80% of its value for almost a year.

Nevertheless, after this long winter, it has risen again to its historical maximum. Indeed, as the 2020 pandemic has complicated the work of traditional markets, investors have begun to pay more attention to the cryptocurrency market. As a result, Bitcoin was able to go from $5,000 in March 2021 to $68,990 in November 2021 in a few months.

We are again in a bear market, where Bitcoin has lost more than 50% of its value, and has been trying to overcome the $25,000 mark for several months. There are more than 300 million investors in the crypto sector in the world. At the same time, some of them are concerned about the current situation.

However, it is worth looking back at the past years and, in particular, the behavior of cryptocurrencies over time to remember that this situation is not new.

Previous Bear Markets

Bitcoin and Ethereum took almost two years to recover from losses during the previous bear market. Despite the sharp drop, these cryptocurrencies were able to bounce back and become the most popular during the pandemic. They were able to reach new records.

While in the traditional stock market, the S&P500 bounced 70% from its low point in March 2020, BTC was able to bounce 450%. Over the same period, the yield of ETH was 1200%. And this is despite the fact that these assets have fallen by at least 50%, which indicates an exponential growth of investors.

In fact, Bitcoin has experienced 4 bear markets since its existence until the winter of 2018. Each time it bounced back and reached a new record high. Moreover, each of these cycles lasted from several months to a year before there was a consistent increase in prices.

If we look at the long-term perspective, then, despite the extremely volatile market, cryptocurrencies have never disappointed when analyzing data over a 5-year period. After the pandemic was contained, many people became interested in cryptocurrencies.

Moreover, even after the resumption of the markets, they are still popular. Investors and users continue their experiments, increasingly using the Internet, which logically leads to greater interaction with the cryptocurrency sector.

Growing sector

New technologies such as blockchain, cryptocurrencies, exchange platforms, new applications show new user preferences. Building a new Internet – Web3, which is based, in particular, on NFT. They involve more people in a more democratic way of making transactions.

Thus, many experts believe that this trend will continue and continue to grow. Indeed, many companies belonging to the Web2 world have doubled their investments in Web3. According to a study by BCG, Bitget and Foresight Ventures, it is expected that by 2030 the number of people using cryptocurrencies will triple and reach at least one billion.

If we assume that this number includes all those who use Web2, then we can assume that they will use cryptocurrencies, since they should be connected to the upcoming new Internet.

More and more large companies are investing in this area, whether it is promoting their company through NFT, as Nike successfully does, or Alphabet is investing heavily in this sector, or Disney has an incubator to help startups using new technologies.

The bear market is just a temporary phenomenon

Many experts believe that cryptocurrencies are still at the stage of adoption by users, just as in the 90s it took time for them to develop and come to all homes.

It is enough to look at the various governments that are trying to define a legal framework for this environment in order to regulate it further, so that it regulates itself. In addition, specialized companies are doing everything possible to protect the sector from pirates and scammers trying to harm cryptocurrencies.

Thus, the cryptocurrency industry should not be underestimated. Yes, we are in a bear market, but this is not the end for this sector, which attracts more and more users and causes media hype, and large companies are investing more and more funds in it.

Thus, the crypto winter is still a temporary phenomenon. The situation will improve over time, and in a few years there is a high probability that this sector will help shape the Internet of tomorrow, especially in Web3 and Metaverse.

Ethereum and the Coming Breakthrough

Ethereum is also having a hard time right now. He is back at the old, beaten-up level of $1,500. However, experts do not see this as any threat to both the crypto asset and the project itself. The reason for this is the ever-approaching “Merger”.

The latest confirmation of the Ethereum merger has arrived, directly from the Ethereum Foundation, confirmation of the dates that have been circulating for several weeks, and which make up the last chapter of ETH in Proof of Work. Confirmation of dates is important for a transition that is long overdue.

After two updates of Bellatrix and Paris, the transition can be considered complete, since the update is certainly the most important in the history of Ethereum, as well as one of the most relevant for the sector, in particular for the world of NFT, DeFi and distributed applications.

This is a good sign for Ethereum, although many believe that this move has already been largely discounted by the markets.

Ethereum Foundation Confirms Merger Dates

There should be no doubt, given that the Ethereum Foundation, which is responsible for the development and management of Ethereum, has also entered this field. A message on the official website identified the last two steps that will lead to the completion of the merger.

This will happen between September 10th and 20th. Why?

In fact, we will have Bellatrix, which will be launched in the epoch of 144896 on the Beacon Chain, that is, at 11:34:47 UTC on September 6, and then Paris, launched by TTD 5875000000000000000, between September 10 and 20, with a wider range of possibilities, given that it will depend on the overall hashrate of the ecosystem, since this will happen in the mainnet still running in PoW.

After reaching or exceeding the aforementioned TTD, the next block will be produced and completed by the beacon chain, and once it is completed, we can assume that the merge has occurred. This step will take 2 epochs and therefore about 13 minutes between production and completion.

Multiplier for bug seekers

There is another important news for those who are looking at Merge, this time concerning the error-finding program. For all errors that will affect this fundamental step in the life of Ethereum, a multiplier of 4 times higher than the normally distributed shares will operate.

The system, similar to the system of many other protocols and chains, becomes even more important, given that up to $1 million can be received from the fund for critical errors. This system should make it easier to find errors, given the economic interest in these efforts.

What do I need to do to prepare?

If we are you nodes and if you are not straight stakers, then absolutely nothing. If you have Ethereum in wallets, directly or through exchanges, you will not have to do absolutely anything, and you will be able to continue using them after the merger without any problems.

It’s quite another matter for miners who will definitely retire and, most likely, will be forced to look for another place, either Ethereum Classic, or other (actually few) projects that are still working in Proof of Work.

As for pure speculators, at least for the time being, it will be difficult to assess whether the merger has already been discounted and priced by the market, or whether it will possibly lead to volatility or short-term growth.

Tycoons for the merger: but it could not have been otherwise

No matter how absurd it may sound, given that Cuban is not a techie, Fortune magazine had the courage to ask the owner of the Dallas Mavericks tycoon about the upcoming Ethereum merger, that is, about the last step to Proof of Stake, the rejection of what many (albeit mistakenly) consider an unnecessarily energy-intensive system.

Mark Cuban replied that he was striving for a merger. But does it matter?

“I’m a fan of the merge. I think the issue of energy consumption is very important. This is a long-term problem, and I do not know when Ethereum will be able to use this step up.”

One comment, as it often happens when very famous people with less than excellent training talk about technical and important issues, was touched only superficially, repeating one of the most useless arguments regarding the transition of Ethereum to PoS. An environmental problem that is a direct attack on Bitcoin, often even organized, and which remains a motivation bordering on the absurd to change the way Ethereum works.

The crypto sector does not need idols, and we will never get tired of repeating this. Perhaps we are going against the trend, because many people need recognizable figures to identify themselves in motion and “know” how to move and how to think. In fact, this is not the case, and many figures who are “external” to the crypto world, but “internal” because they are chosen by newspapers and magazines of a wide profile, may be doing more harm than good to the entire sector.

Because no matter how difficult it is to be a popularizer, no matter how well it is necessary to understand the topic before making it acceptable to the general public, you would also be a little tired of opinions thrown on the front page without any meaning or reason.

For example, about the allegedly wasteful consumption of Bitcoin and its mining: consumption that exists, which is largely based on renewable energy and which is not wasteful because it is constantly embedded in the Bitcoin blockchain. In other words, every bit of consumption directed at Bitcoin mining contributes to its present and future security. And to exclude this important detail from the discussion is a sign of those who do not intend to shed light.

If we go back to Mark Cuban, he certainly has certain merits in the distribution of cryptocurrencies as such, including with the help of his own companies. But, to quote one of the crypto enthusiasts: “Trust the idols, and you will get what you deserve.”

So, summing up, we can say only one thing: even despite all the macroeconomic and political factors, cryptocurrencies are waiting for a big breakthrough, as trust in traditional assets is melting before our eyes, and people will continue to look for alternatives.