Is Ethereum sinking? EIP-1559 burns inspire shaky confidence

Cryptocurrencies like Bitcoin are ‘apolitical’ says financial expert

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Ethereum (ETH) has helped define the cryptocurrency market alongside Bitcoin. Although it is far ahead of its closest competitor, the coin has had a tumultuous 2021, having oscillated through the market in May and June. Ether appears to be struggling to keep a consistent price, but appearances can be deceiving.

Is Ethereum sinking?

Investors can currently buy an Ethereum token for $3,250.91 (£2,355.57).

The coin has recently collapsed in price by roughly 1.10 percent, a modest amount compared to some of its more recent swings.

In the grander scheme, it indicates Ether is settling at a consistently higher price induced by EIP-1559.

READ MORE: Quantum computer poses ‘existential threat’ to Ethereum and Bitcoin

ethereum price today EIP london hard fork evg

Is Ethereum sinking? EIP-1559 burns inspire shaky confidence (Image: GETTY)

Ethereum price: Ethereum and Bitcoin

Ethereum price: Ethereum and Bitcoin have consistently held the top two spots on the crypto market (Image: GETTY)

Contained in the London hard fork upgrade on August 5, EIP-1559 introduced an automated bid system for transactions.

Developers designed the system to keep fees consistent based on network usage and burn parts of each transaction fee.

In theory, burning would keep the supply lower, which analysts believed would boost Ether’s price.

And they were proven right, as Ether is now holding steady on an entirely new level.

Ethereum price: Ethereum price

Ethereum price: Ethereum appears to be settling into its own “new normal” (Image: COINDESK)

On August 5, before London went live, people could pick up a token for $2,587.57 (£1,877.73).

By the time the update had debuted, it had made significant gains, moving to $2,813.25 (£2,041.51).

Overall growth from the update has pushed the coin’s value by more than 17 percent.

Since then, Ether has dropped no lower than $2,612.63 (£1,895.92), meaning EIP-1559 appears to have tamed Ether’s downward swings.

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Ethereum price: Ethereum and Bitcoin

Ethereum price: Ethereum has had a tumultuous 2021, but EIP-1559 has helped (Image: GETTY)

While it may appear to be sinking, the token may be adjusting to a new, more valuable trend.

In the long term, analysts are excited about the coin’s potential progress.

Edward Moya, a senior market analyst at trading platform Oanda, told Business Insider the upgrade should “prove to be very bullish for the cryptocurrency’s long-term outlook.”

He added the token would pull on success from the new minting process as it becomes a “little bit more scarce.”

But anyone considering an investment should take heed of Ethereum’s year-long trends.

On May 12, the token’s value peaked at $4,132.76 (£2,999.04) before collapsing to more than half this.

Just under two weeks later, on May 24, Ether held a value of $2,080.37 (£1,509.67).

Although the London fork has provided some confidence, this latest bull run could disappear just as quickly.

Harry Byrne

Harry Byrne

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