The Ethereum (CRYPTO: ETH) price started off the month trading for US$2,737.
Ethereum finished March worth US$3,424, according to data from CoinMarketCap.
That puts the Ethereum price up an impressive 25% in March. And it went a long way to erasing the painful losses suffered in the first 2 months of the year. As of last night, the world’s number 2 token by market cap was down 12% year-to-date.
So, what moved the Ethereum price in March?
Like its big brother Bitcoin (CRYPTO: BTC), the Ethereum network still relies on a proof of work (PoW) consensus protocol. And that method uses a tremendous amount of energy, as we covered here today.
The Ethereum price thus got a healthy lift in mid-March when the European Union voted against imposing a virtual ban on crypto miners using PoW protocols.
The coming ‘Merge’
Now Ethereum is planning on shifting to a proof of stake (PoS) protocol later this year. The cryptos designers have been busily testing the process.
PoS will see Ethereum transactions become faster, cheaper, and – perhaps most importantly in a world intent on decreasing carbon emissions – a lot less energy intensive.
The coming shift also has some crypto analysts predicting a big move higher for the Ethereum price.
In March, Kain Warwick, founder of derivatives trading system Synthetix, went so far as to forecast Ethereum will almost triple from its current levels. He expects to see it at US$10,000 before the end of 2022.
According to Warwick:
New people wanting to swap dollars for Ethereum and build on top were finding the fees completely prohibitive. But there has been so much work done on scaling the Ethereum blockchain that there is a really credible case for new entrants where it is viable for them to transact.
The upgrade to PoS, also called ‘The Merge’ is expected to move forward by mid-year.
On the first day of April, the Ethereum price is down 4.5% to US$3,267.
The post The Ethereum price rocketed 25% higher in March. Here’s why appeared first on The Motley Fool Australia.
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More reading
- Here’s what ESG investors should know about cryptos like Bitcoin
- Why Ethereum and Dogecoin are dropping today
- This cryptocurrency just exploded 30% higher, overnight
- Ethereum price outpaces Bitcoin as crypto investors eye ‘The Merge’
- Why this lesser-known crypto left Bitcoin in the dust this week
The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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