The price of the second-largest cryptocurrency, ethereum (ETH), showed very nice things in recent months. The ether price has been outperforming the for a while now bitcoin (BTC) course. That’s not to say the stretch is over. According to Jurrien Timmer, a leading analyst at Fidelity, ether is still massively undervalued.
Ether
On Twitter, Timmer shares an extensive fundamental analysis about ethereum. According to him, the ether price is holding up remarkably well and the potential for an upward movement is simply greater than with bitcoin.
The recent performance of ether even leads Timmer to believe that a ‘flipping’ scenario is not out of the question in 2022. flippening This means that ethereum is simply outperforming bitcoin in terms of market capitalization. A lot will still have to happen before that, but according to Timmer it is a scenario to take seriously.
Comparing BTC’s valuation to ETH we see a big discount for ETH, presumably because investors reward BTC for its superior scarcity dynamics. Whether ETH will continue to catch up to BTC will be an interesting thing to watch in 2022. /END pic.twitter.com/TVrWXr8Mfk
— Jurrien Timmer (@TimmerFidelity) December 17, 2021
Fundamentals
The extent to which the Ethereum network grows is a lot greater than that of the Bitcoin network. Ether has even made 260% gains in the ETH-BTC pairing over the past year. According to Timmer, this is due to the explosion of the non-fungible token (NFT) in decentralized finance (DeFi) sectors. Both of course make extensive use of the Ethereum network.
The ETH 2.0 update and the associated switch to a proof-of-stake consensus model to give the ethereum price a huge boost. The problems related to the energy consumption of proof-of-work Networks such as bitcoin and, at present, ethereum have come to the forefront of discussions within the crypto community.
By moving to proof-of-stake, the energy consumption of the Ethereum network will be drastically reduced, thereby alleviating major concerns from potential investors.
In addition, the now implemented EIP-1550 update and the upcoming ETH 2.0 update ensure that ether even can become deflationary. That means there will be fewer ether tokens in circulation every year. This greatly benefits the scarcity of ether tokens. The same scarcity can in turn lead to an increase in demand, while the supply will only shrink. A very positive outlook for the ether price.
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