Ethereum is set for a new bull market
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Fees and expenses are part of every business ecosystem, and the world of cryptocurrencies is no exception. Thanks to the Dencun upgrade, fees on the Ethereum blockchain are set to drop further, and there are some important implications that crypto investors and supporters should be aware of going forward.
Thanks to a very strong start to 2024, the approval of spot ETFs, and companies like MicroStrategy issuing bonds with the express purpose of using the proceeds to buy more Bitcoin. Although Bitcoin continues to attract a lot of attention and investor attention, the reality is that the situation with cryptocurrencies is more nuanced. Specifically, at the same time as the scope expanded and investment capital flowed into Bitcoin, other crypto asset sectors also got off to a strong start to the year. Ethereum ETH is up more than 100% so far this year, the NFT sector is showing signs of revitalization, stablecoin market capitalization is at a multi-year high, and financial institutions are increasing their investment in Ether ETFs. This has sparked speculation about the possibility.
Sure, all of these headlines are worthy of excitement and celebration, but there are other important changes taking place, and one notable change is the further upgrade of the Ethereum network. As the second largest cryptocurrency in the world and a blockchain that supports the majority of Layer 2 applications, changes to the functionality and cost structure of this blockchain are worth considering.
Let's take a look at two ways to reduce the cost of Ethereum and foster innovation and application growth for crypto investors and entrepreneurs.
Popularization of smart contracts
While not as flashy and headline-generating as the price of Bitcoin or the potential for new crypto trading products, the growth of smart contracts will benefit the wider adoption of blockchain and tokenized assets. Smart contracts serve as an integral connectivity bridge for both blockchain-to-blockchain communication and from blockchain to other technologies, so they have an almost endless number of use cases. Additionally, SmartHis Contracts plays a key role in making investing in blockchain-based solutions easier for enterprise users, as it is a tool that enables scalable transactions suitable for business use.
Despite the emergence of Bitcoin-based smart contacts, it is important to remember that Ethereum still serves as the basis for the vast majority of smart contracts. With fees falling again and institutions investing heavily in blockchain and tokenized data options, growth in smart contracts is almost certain. Ethereum developers and investors will benefit from this, even if the price per token remains much lower than Bitcoin. An example of this growth that is already present in the market is that CardanoADA smart contracts have increased by 67% in 2024 alone.
Enhanced NFT functionality
NFTs are a subset of the crypto asset sector that is still struggling to rediscover a viable niche and role in the market. After bursting into the mainstream with the 2021 Beeple auction and experiencing a wild bull market in its aftermath, the NFT space has crashed to virtually nothing. A 2023 study showed that about 95% of NFTs have zero value, but that's only part of the story. At the core of the application, NFTs represent a kind of control and ownership between the digital and physical realms, play an important role in any personal portable data, and play an important role in the development of self-data. Sovereign identity. In short, NFTs are much more than just digital artwork, and gross mischaracterization of these assets in the form of applications such as Bored Apes will continue to be an obstacle to mass adoption.
These obstacles, no matter how big, are not permanent and the market is showing signs of that. In March 2024, Hivemind Capital Partners raised $50 million in funding. This was explicitly aimed at capitalizing on the resurgent crypto market to fund and invest in NFTs. Although the future is uncertain, the discussion around NFTs appears to be maturing along with other aspects of the crypto economy.
Even as Bitcoin continues to hit new all-time highs and attract billions of dollars in investment, the world of cryptocurrencies continues to innovate and grow in many ways. The continuous efficiencies and improvements created through the Ethereum blockchain are proof of this.
Cryptocurrency has reached mainstream adoption and now the industry looks poised to take another step forward in terms of practical, enterprise-ready use cases in the real world. The business and investor worlds should take note.
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