Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is solely the opinion of the author.
Some important developments were seen amid the ongoing bullishness in the last seven days.
On November 15, asset management giant BlackRock spotted Ethereum [ETH] Exchange-traded fund (ETF) applications have officially reached the US Securities and Exchange Commission (SEC) desk.
The same day, the SEC informed that it has delayed its decision to approve the rule change requested by Grayscale Investments to convert its Ethereum fund into a futures ether ETF. The SEC now has time till January 1, 2024 to take a decision. The asset manager applied for the change in September.
The anticipation surrounding the ETF has certainly led to wild price rallies on the charts. However, this has led many to question how much such developments could adversely impact the decentralized model of the crypto market’s underlying blockchain technology. This is why AMBCrypto has also paid attention to the future of Ethereum.
How it started and later split
A child of Vitalik Buterin, the Ethereum blockchain network was first explored in a whitepaper in 2014. His collaborators on the project included Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin.
Subsequently, the team established the Ethereum Foundation (Stiftung Ethereum), a Swiss non-profit foundation. This project was launched in 2015.
Ethereum was created with the goal of being scalable, programmable, secure, and decentralized. It natively supports smart contracts, a key component of decentralized apps. Smart contracts, combined with blockchain technology, enable a vast number of decentralized finance (DeFi) applications.
Users can also generate and exchange non-fungible tokens (NFTs), which are tokens that can be tied to specific digital assets such as photos. Additionally, several other cryptocurrencies use the ERC-20 token standard on top of the Ethereum blockchain and have used it for initial coin offerings.
Only a year after launch, the project split into Ethereum and Ethereum Classic [ETC],
What happened was that in 2016, a group of network participants gained majority control of the Ethereum blockchain in order to steal over $50 million worth of Ether that was raised for a project. The majority of the Ethereum community chose to reverse the theft by invalidating the existing Ethereum blockchain and approving a blockchain with a modified history—Ethereum.
However, a portion of the community chose to maintain the original version of the Ethereum blockchain. The unchanged version of the blockchain permanently split to become Ethereum Classic.
This event became known as the hard fork.
marge and shapela
Ethereum initially employed a proof-of-work (PoW) consensus mechanism. Validating blocks requires energy-intensive computing called mining.
Due to criticism over the environmental impact of the mechanism, the project transitioned to a proof-of-stake (PoS) consensus mechanism in September 2022. This event became known as the Merge.
At this point it is important that we understand what these two mechanisms are and how they differ.
A consensus mechanism involves the rules and protocols that govern how a blockchain network reaches an agreement on its state. The two most popular mechanisms are PoW and PoS.
PoW requires the use of computational power by miners to solve challenging mathematical puzzles and validate transactions. The first miner to solve the challenge receives new coins and transaction fees. Although it is more secure and decentralized, it still uses a significant amount of energy and resources.
Instead of requiring miners to solve problems, PoS requires validators to stake some of their coins as collateral. The network then randomly chooses a validator to create a new block based on the stake size and other parameters. Validators are compensated from transaction fees rather than new currencies.
PoS is considered more scalable and energy-efficient than PoW.
At press time, a total of 28,195,445 ETH tokens were staked, worth $55.6 billion.
ETH is the second largest cryptocurrency in the world, with a market cap of over $233 billion.
A recent report from CoinGecko placed Ethereum as the top layer-1 (L1) blockchain. Its total value locked (TVL) in October 2023 was $23.0 billion.
In 2023, it reached its annual peak TVL of $31.5 billion in April. This was immediately after the merge.
At this point, we decided it was a good time to request the leading AI bot ChatGPT for important advice on these developments.
ChatGPT has proven valuable to traders and analysts. I spoke to ChatGPT about these developments while also talking a bit about the price of ETH.
At first, ChatGPT was not able to provide any details. So I decided to educate myself and jailbreak it.
We then asked him about the impact of the merge on the price of Ethereum.
Source: Chatgpt
The bot told me that the merge had catalyzed an increase in demand and confidence. Its response was not a deviation from real-time data.
In April 2023, the Shanghai hard fork of Ethereum, also known as Shapella, was finalized. The upgrade allowed users to unstake their ETH tokens for the first time since December 2020.
Specifically, Sheppella is a combination of shanghai and a cappella upgrade. Shanghai Upgrade occurs at the execution level, while Capella occurs at the consensus level.
The upgrade was the second-largest blockchain’s most significant development since the merge.
Is Ethereum a commodity or security?
Like most cryptocurrencies, there has been much debate over whether Ethereum is a commodity or a security.
In an important Uniswap court case, the judge ruled in August that ETH is a commodity. The SEC has been reluctant to do so, even though it has not gone after Ether like other tokens.
Recently, Bloomberg analyst James Seifert outlined the SEC’s unspoken stance on the issue.
Even though the SEC will not explicitly claim ETH to be a commodity the way they do for Bitcoin. They have clearly accepted its commodity status over the years. Big shout out to @SGJohnson Who have been critical in forming some of my views on this topic.
– James Seyffert (@JSeyff) 16 November 2023
However, we should also pay attention to any non-obvious classifications so far. The stance of regulatory bodies has also changed over the years, with courts intervening repeatedly.
I asked ChatGPT about Ethereum’s future performance
Ethereum has gradually emerged as one of the most prominent blockchain networks. As expected, it supports a large number of L2 blockchains. The TVL of the Ethereum-based L2 network recently reached an all-time high, surpassing $13.8 billion
📈 Total Total Value Locked (TVL). #Ethereum The Layer 2 network has reached an all-time high, surpassing $13.8 billion.
@Arbitrum Leading with TVL of $7.5 billion. pic.twitter.com/Vr4GOgVPGX
– GN Crypto 🇺🇦 (@GNcrypto_news) 16 November 2023
Due to the recent rally, ETH has been trading around the $2,000 mark for the past few days. At press time, ETH was trading at $1,986.50.
Source: ETH/USD, TradingView
While Ethereum’s Relative Strength Index (RSI) remained below the neutral 50-mark, its Money Flow Index (MFI) remained above it. It seemed like there was a tussle going on between the bears and bulls regarding ETH.
We then asked ChatGPT to predict the price of Ethereum at the end of the first quarter in 2024.
Source: Chatgpt
It forecasts the price of ETH to reach $7,000 by the end of the first quarter of 2024. In short, he expects ETH to increase by more than 3x over the next five months – an extraordinary expectation, frankly.
Next, we asked him what he thinks about the price of ETH by the end of next year.
Source: Chatgpt
The bot told me that it predicted ETH to reach $10,000 by the end of 2024. He expects the cryptocurrency to grow 5x in the next year.
Although this is a very high expectation, we should not dismiss it outright. We have yet to see the widespread impact of ETFs on the crypto market. It’s very possible that this could lead to widespread adoption, which could lead to a rise in token prices.
Is your portfolio green? View ETH Profit Calculator
conclusion
After the encounter with ChatGPT, I have to admit that it might be a good idea to take advantage of its capabilities. As technology evolves, so does its potential to revolutionize the cryptocurrency ecosystem.
Furthermore, many crypto projects have seen a slowing in network growth recently. But with ChatGPT available, crypto education and adoption may improve.
More importantly, you might want to take its “classic” response a little too seriously.
ChatGPT proved to be a reliable ally as far as Ethereum price analysis and prediction is concerned. You just need to interact with it enough and it will guide you to the moon.
While ChatGPT estimates that ETH will reach a price of $10K by the end of 2024, its on-chart metrics do not indicate a bullishness.
Source: eng.ambcrypto.com