Ethereum price started seeing growth over the last 10 days, as its London hard fork, scheduled to take place in July, approaches. The coin’s price has been dropping gradually throughout June, only to hit the lowest point in months around June 26th, at $1768. However, as the attention shifted to the incoming hard fork, the hype surrounding the new update pushed the price back beyond $2k.
In fact, Ethereum nearly hit $2,400 this Sunday, peaking at $2,384. However, as the new week started, the price sank back down, sitting at $2,269 at the time of writing.
One interesting thing regarding this latest price increase is that data shows that trading volumes remained relatively low, at around $18 billion. Another thing that may have had an impact on the price, causing it to grow as it did, was the expiry of $230 million in options contracts. The contracts expired only two days before ETH reached its two-week high, on Friday, July 2nd.
With the contracts expiring, bulls and bears started announcing their expectations for the future, and the bulls managed to gain a lead. At the time of writing, the coin is still 11% higher than one week ago, even though it suffered a 2.77% drop in the last 24 hours.
What is the London hard fork?
The long-anticipated London hard fork is bringing a new upgrade that Ethereum is going to receive later this month. The hard fork is expected to have a strong impact on Ethereum’s price, and indeed, some of this impact has already arrived before the fork itself.
As some may already know, Ethereum is planning to bring several new mechanisms. One of them is the so-called scarcity mechanism, which will introduce regular burns of ETH tokens. As a result, the project’s circulating supply will start to drop, meaning that there will be fewer ETH coins available, which should result in a price increase.
Furthermore, this is also the upgrade that will allow Ethereum to finally switch to Proof-of-Stake, and abandon Proof-of-Work. A major consequence of this will be lowering Ethereum’s carbon footprint, but also its gas fees, which have skyrocketed earlier this year due to all of the activity on the network.
Ethereum has its regular trading and investing, dApps, smart contracts, DeFi, and even NFT sector, which exploded in 2021. All of this activity made extreme amounts of traffic on a network that can only handle a handful of transactions per block, causing lengthy waiting periods, and massive transaction fees for those who wanted their payments to be processed faster.
A historic moment for ETH
A switch to PoS will help reduce those fees and potentially bring back developers, projects, and traders who have left for more affordable networks due to the high fees. Indeed, the exposure to ETH is already growing, with the last week already registering more than 750,000 active addresses, which is even more than what Bitcoin currently has.
Analytics company called Santiment noted this down as a historic moment, as this was the first time that Ethereum’s active addresses surpassed those of the world’s first and largest cryptocurrency.
Speaking of Bitcoin, it should also be noted that BTC did not see a similar price movement as ETH. Instead, the coin continues to trade sideways, slightly below mid-$35,000s, which is where it mostly spent the entirety of the last month.