The cryptocurrency market has continued to recover over the last few days. In fact, the crypto-market gained a total of $150 billion to its capitalization, which now stands above $1 trillion. Ethereum is the absolute leader in terms of price performance over the last few days too – Up by 22% in a week and 5% in 24 hours.
While this may be a relief for ETH enthusiasts, the altcoin’s two-sided storyline might just soften the tone here.
Highs to lows
First, some good news.
Ethereum 2.0 has over $18 billion worth of ETH in its deposit contract leading up to the chain’s full upgrade this year.
The deposit contract for staking on the Beacon chain – the blockchain providing the spine of the Ethereum 2.0 ecosystem – has now collected over 13 million ETH.
That’s $18.5 billion of staked value at current prices.
Ethereum 2.0 is a long-awaited Ethereum upgrade, which will convert Ethereum’s consensus mechanism from proof-of-work to proof-of-stake. The Beacon chain remains the heart of the Ethereum 2.0 chain, which is expected to merge with the existing Ethereum chain and replace the miners by July this year.
Likewise, Glassnode reported that the number of addresses holding more than 32 ETH has reached a 16-month high. I.e. the number of tokens required to run a validator node. However, with so many exchanges offering staking services, investors can stake with fewer than this amount.
Bad news to follow
However, here comes the concern over the unstaked aspect of the largest altcoin – Ethereum price has fallen by around 75% since its peak. And yet, network revenue/activity has declined further.
Andrew Kang, a popular crypto-analyst recently shed light on this scenario in a series of tweets. He asserted,
“At the top, Ethereum was trading at 33x P/E, it is now trading at 123x P/E. If ETH was trading at 33x P/E today, it would be trading at $360.
Here, PE represents the Price/Earning ratio. This, as per the trader, remains an “expensive” level, as observed by an 18 July tweet.
