Nikolaos Panigirtzoglou, managing director of global market strategy at JPMorgan stated:
“Essentially, a larger network of users and miners makes the underlying blockchain more secure and implies greater acceptability of the cryptocurrency on that blockchain.”
According to analysts, on the basis of mining activity and the count of distinct active addresses on Ethereum blockchain network, Ether should be trading at about $1,000 or 7%% below the current level.
“Prices appear to have diverged somewhat from the measures of network activity since the start of the year.”
The price of Ether has jumped by 121% in the past three months to hit the current level of $4,227, reflecting a gain of 8.9% in the last 24 hours. The Ether rally is a portion of the overall boom in DeFi platforms that guarantee enabling of cryptocurrency denominated lending outside conventional banking.
Primary factors such as rising institutional interest and future network improvements, according to JPMorgan analysts, have encouraged investors to take the lead. The European Investment Bank, which issued notes worth $122 million on the Ethereum blockchain network, demonstrated that the technology is gaining traction in the business community.
Furthermore, a big network improvement that will see certain Ether coins burnt to minimize supply is forcing investors to flood the market in expectation of a potential price rally. Programmers are still working on a major update labeled as EIP-1559 that is expected to resolve the gas fee dilemma.
Ethereum’s notoriously high gas fee model is about to be succeeded by one that is randomly calculated. The charge can vary depending on network traffic. The JPMorgan analysts have discussed how the market capitalization of altcoins like Dogecoin, Ethereum Classic, Litecoin, Binance Coin, and others have risen dramatically in recent weeks. They noticed that Bitcoin’s market dominance has dwindled in recent months.
“The share of bitcoin in the total crypto market has fallen steeply over the past month from around 55% to below 35%.”