Since the conclusion of Ethereum (ETH) Merge, experts seem to suggest that the blockchain carries potential to tackle bear market implications. It’s believed that ETH-oriented use cases will be helpful for investors to pull through the bear market.
According to Alchemy, a Web3.0 development platform, total ETH transactions reached 105.58 million for Q1, 2022. The platform also stated that 1.45 million smart contracts were deployed for the same period, which resulted in enhancement of ETH-based development practices. “In a bear market, investors may shift their focus from short-term price movements to long-term potential, leading to interest in the development of decentralised finance (DeFi) applications, non-fungible tokens (NFTs), and other use cases for ETH,” Suman Bannerjee, CIO, Hedenova, a US-based hedge fund, told FE Blockchain.
From the crypto market’s purview, ETH staking can ensure high returns for proof-of-stake (PoS) protocols such as Solana, Avalanche, Polygon, and Cardano. Insights from media reports have mentioned that upcoming ETH Shanghai Upgrade can result in value addition through withdrawal of staked ETH. In a bear market, ETH’s low gas fees can give birth to new projects and ensure cheaper trade rates. However, the 4.25% to 4.5% range for Federal Reserve rates can cause a depreciation in Ether’s value with respect to dollar, which can impact the bear market.
“Once staking withdrawals are allowed, it is expected that ETH staking will become mainstream, resulting in gains to the amount of ETH staked. Post Shanghai upgrade, this amount in $ terms is anticipated to increase and liquid staking derivative solutions can bank on this growth,” Parth Chaturvedi, crypto ecosystem lead, CoinSwitch, a crypto application, highlighted.
Moreover, future predictions indicate that Ethereum-backed Layer-2 solutions are being developed to enhance scalability for roll-ups and data sharing. Experts suggest that the bear market could give rise to competition between ETH and other blockchains, for 2023 and beyond. “I believe the future of Ethereum looks bright. Its transformative applications can champion the Web3.0 revolution with use cases being developed across various industries,” Raj Karkara, COO, ZebPay, a cryptocurrency exchange, concluded.