Thank Ethereum for your Crypto Portfolio Rebound

Why has your crypto looked so much better the past few days? Look no further than Ethereum. Despite overall macro economic conditions that would likely continue to propel markets downward, Ethereum has turned the corner recently after falling to the $1,000 mark thanks to some positive developments that are encouraging both whales and minnows alike.

An unknown crypto whale bought $1.7 billion worth of Ethereum (ETH) in less than one hour yesterday as reported by Kate Young Ju of CryptoQuant. The purchase was helped propel the biggest hourly Ethereum volume in market orders in seven months according to her tweet.

This is a very bullish move buy a large investor who is betting on positive ETH price action moving forward. It signals that someone with a lot of capital and a lot of resources, well beyond those of average investors like you and me, thinks that the worst may be already behind us.

Ethereum is the second largest cryptocurrency behind Bitcoin (BTC) as ranked by market capitalization and has been on a tear the last few days leading alt coins higher ever since Ethereum Foundation's Tim Beiko said the merge could happen the week of September 19 at the start of the weekend. While no hard firm date has been given, just a target date was enough to send the price of ETH up and up. From around $1,000, the coin has spiked more than 50% to over $1,600 before a small step back has brought it to its current price.

Ethereum is a global, open-source platform for decentralized applications (Dapps) which has helped create and entire massive ecosystem around the con. ETH hit it's all-time high of $4,878.26 on Nov 10, 2021 but has struggled since like most of the cryptocurrency market.

The proof-of-work (POW) mechanism being utilized by Ethereum is inefficient from an energy standpoint and the switch to a proof-of-stack (POS) model aims to solve that. POS networks are dependent on "validators" that put up their own ETH as collateral for the opportunity to update the Ethereum blockchain with the most recent verified transaction. In exchange, these "validators" will earn newly minted ETH instead of the miners who earned the coin under the POW model.

This move to POS, however, has been talked about since Ethereum first launched in 2015 and the actual date has become somewhat of a running joke in crypto circles. The Ethereum network has also been criticized for being to expensive and although the "merge" to ETH2.0, as the upgrade was formerly known, won't solve that the transaction costs on the network have been falling.

The merge is a combination of the current ETH POW blockchain with a POS blockchain called the Beacon Chain which has been around since 2020. After the merge has been completed, the Beacon Chain will start validating all new transactions and managing the smart contracts built on the blockchain. There are already hundreds of thousands of validators for ETH on the Beacon Chain with more than 13 million ETH already staked. These stakes, however, will not end once the merge is complete meaning there cannot be a massive dumping of Ethereum at that point.

Ethereum will continue to be upgraded after the merge. Up next is and effort to speed up the network through the introduction of "shard chains." Instead of relying on one blockchain, the network will expand to 64 but this cannot happen until the merge is completed because these shard chains depend on staking.

Ethereum's co-founder, Vitalik Buterin, is somewhat the face of crypto given Bitcoin's Satoshi Nakamoto is a  pseudonymous person or group of people behind the world's largest cryptocurrency. Speaking at the Ethereum Community Conference (EthCC) in Paris recently, Buterin remarked, “Ethereum can go up to being 55% complete after the ‘merge.” Buterin went on to say, "We're getting close, which is really amazing."

It isn't just the one whale whose $1.7 billion bet on ETH driving up the market, other whales and smaller investors alike are betting on Ethereum as well. Data provided by Santiment shows an increase in ETH holder wallet addresses on both fronts. The holding $1K-$100K jumped nicely in early July after bottoming out in May. The number of investors holding at least one ETH coin has just jumped to over 1.5 million, an all-time high. Big whales holding 100 or more ETH coins has climbed to more thank 45K, the most in the past 15 months.

So why is this important to you? It is usually Bitcoin driving the crypto markets but this time it is Ethereum leading Bitcoin higher along with the rest of the coins and tokens. Given the bear market, even if this turns out to be a bit of a relief rally it has been a "relief" if nothing else from the downward momentum and that is good news to all. This has helped push the cryptocurrency market cap past the $1 trillion mark for the first time since mid-June and stopped some of the bleeding and pain crypto investors have been suffering during this crypto winter cycle. Development on the Ethereum network remains very strong leading to innovation in decentralized finance (DeFi) which will help onboard new investors in crypto helping the entire mark push higher.

So if you are enjoying all the green candles in your crypto portfolio as of late, better thank Ethereum even if you don't hold any!