Crypto Frontline

Although Ether continues to be the main competitor of Bitcoin in terms of market cap and despite the fact that Ethereum is the leading platform for blockchain-based applications using smart contracts, developers and researchers working have great plans for the years to come.

We’ve seen recently how the Ethereum Foundation wants to invest $30 million in R&D, ETH 2.0 and other areas. The entity is already working on the steps to move from a PoW (Proof-of-Work) to a PoS (Proof-of-Stake) validation system.

Details from a researcher

Justin Drake, an Ethereum 2.0 researcher at the Ethereum Foundation recently gave a few timelines, as the technology-focused media Trustnodes reported two days ago:

Here’s a possible timeline highlighting the key milestones: January 2020: beacon chain launch. June 2020: eth2 light clients production-ready. November 2020: eth1 fork #1 to have its fork choice rule honour eth2 finality (conservatively, no issuance reduced). March 2021: eth1 fork #2 to reduce issuance by 10x.

Other than the transition towards a PoS, the significant reduction of issuance could be showing that the Foundation aims to keep the Ether price elevated. Bitcoin, with a maximum of 21 million that could be mined had been constantly leading the market in terms of valuation.

Since Ether volumes on decentralized applications registered a new high in April, with 776,000 ETH transacted, the Foundation knows that a new sharp drop in value could make some of those companies look for other alternatives.

ETH price performance improved in 2019

If in January 2018 Ether was trading above $1,400 per piece, until December it dropped below $100, even though it was one of the most promising tokens in the market. At the time of writing, Ether trades close to $290 on the Bitfinex exchange, after recovering more than 200% from the 2018 lows.

As compared to Bitcoin, it had been an underperformer, perhaps due to a huge number of changes that the Ethereum developers want to implement in the next two years. The ETH price seems to have made a false breakout around a key area mentioned in our last weekly crypto analysis, which is not a very good sign for buyers.

Same as with Bitcoin, the price action picture for the buyers had already begun to deteriorate and near-term continued gains are now under a question mark. Fueled by new regulatory concerns surrounding cryptocurrencies, we could be at the beginning of a deeper retracement lower.