Ethereum enters the new year with great momentum. Known as the programmable blockchain, Ethereum can handle smart contracts, which are self-executing contracts executed on the blockchain when certain conditions are met. These contracts are currently fueling non-fungible tokens (NFTs), which are digital files such as art, audio and video tokenized and stored on the blockchain. Smart contracts help create NFTs, designate the owner of the NFT, and allow them to be transferred when they are bought and sold. It is one of the many ways that Ethereum has shown the world its practicality.
Ethereum is also ready to upgrade to Ethereum 2.0. Once completed, the update will make your network safer and more efficient. By easing congestion - and hopefully gas taxes - far more transactions per second will be allowed. The upgrade will likely make Ethereum more deflationary because Ether tokens are now burned during every transaction.
It is always difficult to predict what will happen with the cryptocurrency market. But in the past few months, higher inflation and Federal Reserve actions - including lowering its bond purchases and the indication of interest rate hikes next year - have hit the cryptocurrency market in a similar way. to what hit the growth stocks. If rate hikes happen, I don't think that's a good thing for the crypto market given what has happened recently.
Although there has been a lot of talk about "flippening" in which Ethereum's market cap will surpass that of Bitcoin, I'm not sure this will happen in 2022. Ethereum has held up well against Bitcoin considering that the largest cryptocurrency in the world has only grown by the 73% this year. More and more banks appear to offer Bitcoin-related crypto services, and the market seems to see this as more hedging against inflation than Ethereum. Furthermore, El Salvador has adopted Bitcoin as its legal currency.
Never say never in the cryptocurrency world, but I don't think Ethereum will hit $ 1 trillion market cap next year. Macro conditions could make this difficult, and it would seem like a stretch for Ethereum to overtake Bitcoin in a year, not that it can't happen in the long term. I'm still pretty bullish on Ethereum and think it might have a good year, but reaching $ 1 trillion in 2022 might be tough after a year as strong as 2021. In the long run, I'm sure Ethereum will eventually hit market share. of $ 1.000 trillion and more.
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