Will Ethereum’s Bear Market Continue in 2023? 6 Key Considerations (Op-Ed) – Cryptonium News

Will Ethereum’s Bear Market Continue in 2023? 6 Key Considerations (Op-Ed)

Aside from the start of MetaMask’s PayPal integration, which is positive news for Ethereum, recent news about the world’s largest smart contract blockchain is particularly yawning.

Compared to last year, ETH is currently trading at a 68% discount, highlighting the recent downturn in the bear market.

But it is also worth noting that this is the most frenzied bubble with the most devastating crash in the cryptocurrency market, with one crypto business and altcoin after another closing down after the drop.

What Will Happen to Ethereum (ETH) in 2023?

Will Ethereum, and its counterparts Bitcoin (BTC) and Binance Coin (BNB), grow in 2023?
While half of Bitcoin is on virtual currency exchanges, with high liquidity between virtual currency trading pairs and unprecedented speed of transfer through virtual currency exchange infrastructure, major altcoins such as Ethereum could suffer the same fate as BTC.

What that fate will be is a question everyone in this market is waiting to see and fears will cause further disruption to the system.

For your information, dear reader, below are three bearish predictions for Ethereum and three bullish predictions for the cryptocurrency behind the world’s oldest and most powerful smart contract blockchain.

Four Bearish Cases for Ethereum (ETH) in 2023

Fed’s Hawkish Policy .

The Federal Reserve recently raised its key interest rate, the Federal Funds Rate, by 50 basis points to a range of 4.25% to 4.5%.

The purpose of the Federal Reserve’s rate hike is to raise the cost of funding the U.S. international banking system by making technical adjustments to broad money market purchases from U.S. banks and financial institutions.

As a result, the dollar will strengthen at floating exchange rates against other currencies.
This applies to legal tender from foreign central banks (traditional financial or TradFi) and to large liquid digital assets such as ethereum. As a result, ethereum traded against the U.S. dollar and stablecoins pegged to the U.S. dollar will depreciate slightly against the dollar.Otherwise, this would be the basis for a bearish valuation of ethereum over the next two quarters. We will know if the Federal Reserve’s hawkish stance represents a new long-term monetary regime or if the world’s most powerful central bank will refuse to raise dollars in the face of recession and excessive deflation.

Bitcoin Maximalism and Captivity

Bitcoin’s maximalism and the intense competition for capital between Ethereum and Bitcoin could pave the way for BTC against ETH, depending on how the relationship between the two develops.
The lauded merger to upgrade the entire Ethereum core network from a blockchain that achieved network consensus via proof-of-work to a proof-of-share (POS) blockchain is not without controversy.
Bitcoin maximalists consider the BTC blockchain proof-of-work to be a very important development in the global network economy.

It is not uncommon for virtual currency enthusiasts to believe that Bitcoin has what they see as a moonshot to eventually beat out Ethereum and central bank legal tender, take huge market share from Ethereum, and become the reserve currency for the entire global economy. . . for final settlement and cross-border transactions.

They specifically criticize Ethereum’s network consensus model, stating that it is susceptible to pushback from centralized and federated corporate players. For example, many Ethereum participants in the POS model use Amazon Web Services cloud servers to host their nodes.

Broad Bitcoin Bear Market Could Pull Ethereum

Much like the state of Bitcoin, the global cryptocurrency king with the largest share of the cryptocurrency market, so did other cryptocurrency exchange markets.

One can only speculate on the future of bitcoin in the first half of 2023, but those waiting for the bottom of the bitcoin market should not hold their breath. Bitcoin continued to take a beating in the fourth quarter of 2022.

The November drop below the key $20, 000 psychological support level at which the bitcoin market had been range trading since June was the final nail in the coffin of hope that the bitcoin price would not fall.

The 2023 Bull 4 Case for Ethereum (ETH)

Ethereum Merger and Ethereum Fundamental Analysis

The Ethereum merger was not only the most impressive update to a highly complex networked distributed database in the history of the Internet, but it also went very smoothly without any significant disruption.

The size of the stakeholder investment in programmable money alone (80, 000 contributors x 32ETH =~USD 3 billion) is hard to miss in the long run and we believe that ETH is a digital asset worth investing in.

That does not mean it is worth buying in a frenzied bull market, but since the price has adjusted since the last ATH it seems cheap to me.

Shanghai Modernization and Institutional and Corporate Penetration
After moving the Ethereum Core Network into the POS Beacon Chain, a new network is being created, although the Ethereum Network will likely not fully function as a Proof-of-Stake network.

The merger took place through a two-step process called the Bellatrix and Paris upgrades. The Shanghai upgrade is next.

In March, users will be able to withdraw the ETH offered, which will add some value to Ethereum, but note that the transaction value of the virtual currency may decrease.

Gas Prices, Usage, and Developer Statistics

Before and after the Ethereum merger earlier this year, cryptocurrency market watchers debated whether this would reduce gas costs on the network. While the gas price for Ethereum is not lower than it was before the merger, it is actually no higher than it was when we were last in bubble territory.

Outside of the bubble, ethereum fees have been remarkably stable over the years. Meanwhile, the number of new projects and developments continues to grow at the same rate. Considering that inflation in other commodities spiked in the last macro-market cycle, ethereum prices are now cheaper than they were before the pandemic and the massive global expansion of the paper money base.

The Ethereum network continues to rank first among blockchain-based distributed computing in terms of the number of new projects and developments, the number of newly issued coins, tokens, and contracts, and all fundamental measures of its size, impact, and importance Rank. Blockchain Ecosystem. And a healthy and profitable growth rate.