Ethereum’s ratio has finally recovered, rising by some 20% over the past week from a low of 0.03 BTC to above 0.035 before swinging to 0.033.
For the past two days ethereum has been clearly leading, rising considerably while bitcoin stood still, with bitcoin usually following.
This change coincides with the approval of EIP1559 this Friday. That ends what was a mini-debate in ethereum and brings about a halvening of sorts this summer.
Ethereans now daily pay miners as much in fees as in block rewards and on some days, like the one highlighted above, they pay not far off from 3x more in fees than in block rewards.
The new EIP burns these fees, with the network itself calculating what should be the fee based on a target of 50% capacity.
In addition it makes network spamming uneconomic for miners because they too will be paying to use the network.
Just this February and by a rough calculation, some 400,000 eth would have been burned in fees if the EIP was live. That’s 0.5% of the total supply.
As these fees that use to go to miners now just vanish, once the EIP is implemented in July, you’d think significant sell pressure from miners would be taken out of the market.
Thus understandably ethereum’s valuation is seemingly changing with the market re-adjusting to take into account this new halvening, hence the ratio gain.
In combination, some bullishness seems to have returned to defi with Uniswap up to $33 from a low of $20 at the beginning of this month.
A number of these defi dapps are now moving to second layers to add magnitudes more capacity, something that should bring significant growth once implemented.
Finally the NFT boom is directly benefiting eth because all of these unique tokens are priced in eth, thus some might want eth just to buy the tokens.
All of this has led to a rise in eth’s price for the past two days, with ethereum finally taking the show once more and seemingly leading the whole crypto space at least for now.