Cryptocurrencies are relatively new assets that reached their current popularity levels as a result of their penchant for innovation and development. While many investors were reluctant to give digital coins a try in the beginning, owing to their infamous volatility and fluctuations, many were ultimately convinced and have since started integrating the holdings into their portfolios as a means of achieving diversification and protecting their capital against the effects of devaluation or market crashes. Ethereum is one of the most important crypto coins in the world, second only to Ethereum in terms of market cap levels.
However, this hasn’t prevented it from recording some massive corrections during the second and third quarters of 2024, in spite of having a very solid start at the beginning of the year. Yet, Binance data shows that investors have reasons to remain optimistic since it is very much likely that the current downtrend is nothing more than a regular occurrence before the ETH coin price rally starts picking up speed. Historical data indicates that this isn’t a singular event and that similar scenarios have occurred previously. When this happens, the entire marketplace knows growth is in the making.
Research development
The number of people working behind Ethereum’s development and research department has climbed by more than 2,100% since 2019. During the first quarter of the year, there were just around twenty-five people working in this area, a stark contrast compared to the 550 of the first quarter of 2024. The innovation pace is directly correlated to the number of researchers that are contributing to the protocol. During Q2 of 2024, there was a slight decline in the number of developers, with the figures reaching 450, but the brain power remains strong and is bound to take the platform even further.
Leading blockchain
Ethereum is one of the best-known blockchains in the world, renowned for its introduction of innovative technologies such as decentralized finance and applications. While it is still a niche technology, researchers predict that things won’t stay this way and that the decentralized ledger will soon find applications in real-world businesses and industry sectors. The blockchain has the ability to create reliable records owing to the fact that data cannot be removed or modified once it enters the system. This is naturally good news for enterprises since it means that they don’t have to be concerned about safety or fraudulent activities.
Ethereum remains the leader in terms of monthly active developers, with nearly 3,000 full-time developers and almost 9,000 in total, based on data recorded in July. However, others have pointed out that research indicates Ethereum has seen a significant 10% decline in the number of yearly developers, while others are recording increases. When it comes to contract deployers, Ethereum comes in sixth place, with around 127,702 members.
Price growth
Price fluctuations are nothing new in the crypto environment, with the fluctuations capable of significantly reducing or boosting values in as little as a couple of hours. At the moment, the price is relatively stable, although stagnation can also breed uncertainty among investors who are unsure how to develop their strategies. There are many things that should be taken into consideration, and when it is challenging to make estimations and predictions, that is quite difficult to achieve. Most investors are optimistic about Ethereum, and indeed, as of November 14th the price had breached the $3,000 level, settling at $3,226.
However, investors point out that Ethereum’s development has been quite extraordinary when considered from a broader perspective. Over the past five years, Ether saw price growth of no less than 1,200%. Back in August 2019, the price was a meager $168, and it is now above the $2,500 area. As such, an investor who put $1,000 into Ethereum five years ago will now find that the same sum is worth $14,900 based on the current valuation. The long-term momentum is, therefore, bullish, and most investors expect prices to continue on an ascending path, with the ultimate goal being $6,000.
This is a crucial point for Ethereum, and as of late August, there is no indication that Ethereum has broken through this area. The reason for that is the fact that the price was not resilient enough to consolidate above the resistance level and didn’t have sufficient volume. The market researchers who had their sights set on an Ethereum rally above $3,000, had reason to rejoice as ETH surpassed that level. The fact that exchange-traded funds were officially approved earlier this year has led many to believe that a stronger rally is in the making.
Ethereum Foundation
The Ethereum Foundation is a non-profit entity operating within the cryptocurrency sector. It is based in Switzerland and has become the backbone of the Ethereum blockchain. Its purpose is to support the developments and innovations occurring on the blockchain, as well as ensure the sustainability and usability of the network. Recent data shows that the Ethereum Foundation increased yearly spending on new institutions, an area that accounted for nearly 37% of all its expenses. Layer-1 solutions, including development and research, made up almost 25% of all Ethereum Foundation expenses in 2023.
However, both the foundation and founder, Vitalik Buterin, were criticized by decentralized finance developers for what were perceived to be steps that were taking the network away from DeFi. In response, Buterin highlighted Ethereum’s longtime focus on decentralized exchanges and sustainable projects. At the same time, he reiterated his belief that there’s no point investing in projects with outlooks that are clearly short-term and which won’t be able to hold themselves together. This includes areas such as liquidity farming or temporary schemes that rely on the issuing of new tokens that are then brought to the market right away.
Ethereum is still gathering its strength and recovering after the difficulties of the past couple of years, and it seems like it still needs more time to regain its strength. Remember that all investors should have a strategy that suits their trading style, so if you want to make sure that your portfolio and holdings are safe, you need to do your research and come up with a game plan that allows you to succeed.
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