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Ethereum underwent a huge network upgrade called the merge which proponents say will make transactions much more energy efficient. Following the merge, ether prices have dropped following a huge run up ahead of the event.

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Ether has spiked this week to a nine-month high, ahead of a major network upgrade that some crypto enthusiasts say will make the digital currency a more profitable long-term investment.

The world's second-biggest cryptocurrency is up about 6% over the past three days, surpassing $1,900, while bitcoin is roughly flat over that stretch.

Beginning next Wednesday, an upgrade to the blockchain, dubbed "Shapella," will allow owners of ether to withdraw their assets. Up to this point, investors would have to use centralized exchanges like Coinbase or decentralized finance (DeFi) protocols like Lido, to essentially exchange their locked-up ether for a token of equivalent value.

The recent rally has followed a similar pattern to past bouts of enthusiasm surrounding network upgrades. In September, ethereum ran up ahead of a historic transition to a more energy-efficient way of securing the network, called proof-of-stake.

Ethereum previously had a vast network of miners all over the planet running highly specialized computers that crunched math equations in order to validate transactions. After the so-called "Merge" upgrade in September, ethereum migrated to a proof-of-stake system, swapping out miners for validators. Instead of running large banks of computers, validators leverage their existing cache of ether as a means to verify transactions and mint new tokens.

"Ether itself becomes a productive asset," said Danny Ryan, a researcher at the Ethereum Foundation, regarding the September upgrade. "It's not something you might just speculate on, but it's something that can earn returns."

In the post-merge era, ether has taken on some characteristics of a traditional financial asset, paying interest to holders.

"It's probably the lowest-risk return inside of the ethereum ecosystem," said Ryan, adding that yield in other corners of DeFi involve smart contracts and other types of counter-party risk.

So far this year, ether has underperformed bitcoin, but recent gains have helped to close the gap. Ether is up nearly 59% this year, versus bitcoin's gain of 70% in 2023.

Currently, over 18 million ether tokens worth about $32.5 billion are staked, meaning that 15% of ether's total supply are considered locked assets.

While the coming upgrade will unlock much of that value, giving holders more control over their assets, there's some concern that the release of so many tokens will have a flooding effect of sorts on the market. Even with capped withdrawals, some $2.4 billion worth of ether could hit the open market, K33 Research said in a note on Tuesday.

"A plunge is likely to happen shortly after the completion of the upgrade, as a huge amount of ETH will be unlocked, and many people will also be selling their ETH," said Ilya Volkov,who runs a blockchain-based fintech platform. Volkov said he's bullish over the long term.

The ratio between the open interest ofether put and call options reached its highest level since May on Tuesday, according to data presented by crypto data analytics and news firm The Block. That could signal a buildup of bearish bets leading up to the network upgrade.

According to research from Bernstein, of the 18 million ether tokens locked on the blockchain, almost 70% are staked through protocols like Lido, creating a measure of liquidity for investors.

"Liquidity for 70% of staked ETH is not new, they could do it anyways," Bernstein wrote. The firm described the remaining 30% of holders as "original believers," who are unlikely exit their positions at this price.

Having the ability to deposit and withdraw tokens might encourage more investors to stake ether, and some analysts said they expect a significant influx of capital onto the network once it proves that money that's been staked can be taken out with relative ease.

WATCH: Bitcoin climbs as investors shrug off regulatory concerns

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Ether is rallying ahead of major upgrade that will let holders more easily access their tokens - CNBC

The debate between Bitcoin (BTC 0.31%) and Ethereum (ETH 0.21%) as a better investment has been a hot topic in the cryptocurrency community for years. Both are popular and established cryptocurrencies, but there are key differences between them that make Bitcoin a better investment. The reason for this belief can be boiled down to three simple reasons.

Image source: Getty Images.

Market capitalization, or "market cap," refers to the total value of a company or asset. In the case of cryptocurrencies, it is calculated by multiplying the total number of coins in circulation by the current market price of each coin. As of April 1, 2023, Bitcoin has a market cap of over $545 billion, while Ethereum's market cap is just under $220 billion.

Essentially what this means is that Bitcoin is currently a more established asset than Ethereum and makes up a disproportionate amount of value in the entire crypto asset class. As of today, Bitcoin accounts for more than 45% of all the value in crypto.

Its higher market cap indicates that it has more adoption and more trust among investors. Additionally, it suggests that Bitcoin is less volatile than Ethereum, as it would take a larger amount of money to move its price significantly.

One of the most significant differences between Bitcoin and Ethereum is their supply. Bitcoin has a hard cap of 21 million coins, which means that there will never be more than 21 million bitcoins in circulation. Currently, there are around 19.3 million circulating, with the remaining 1.7 million yet to be mined. Even better, though, these remaining 1.7 million bitcoins will be released at a diminishing rate for the next 117 years until the last bitcoin is mined.

Currently, Bitcoin's inflation rate is a minimal 1.7%. However, due to the gradual decrease in the rate of new coins being created, it is estimated that by 2056, this number will fall below 0.1%. By the year 2100, Bitcoin's inflation rate will be somewhere around 0.000001%. No matter the asset, an inflation rate this low helps to ensure that prices are not only maintained but grow as demand competes for a more limited supply.

Ethereum, on the other hand, has no hard cap. While it does have a mechanism known as burning to remove ether from circulation, there is, technically, no overall limit on the number of ether which could enter the market. Unlike Bitcoin, this means that Ethereum is subject to unknown levels of inflation, which can decrease the value of each individual coin over time.

Furthermore, Bitcoin has a stronger track record when it comes to security and decentralization. Bitcoin's blockchain is the most secure and decentralized of any cryptocurrency, with thousands of nodes and miners around the world helping to verify transactions and maintain the network. This makes it less susceptible to hacking or manipulation than Ethereum, which has had several high-profile security incidents in the past. Additionally, Bitcoin's decentralized nature means that it is not subject to the same level of centralization or regulation as Ethereum, which has been criticized for being too closely tied to its founders and developers.

In addition, Bitcoin has a more established and secure network than Ethereum. Bitcoin's network has been operating securely for well over a decade, and its underlying proof-of-work technology has proven to be reliable and resistant to attacks. Ethereum, on the other hand, has had some security issues in the past, including a major hack in 2016 that resulted in the loss of millions of dollars worth of ether. While Ethereum's security has improved over time, it still lags behind Bitcoin in terms of reliability and security.

While Ethereum might be deserving of a spot in your portfolio, Bitcoin provides investors with a safer and more dependable option. Likely the greatest advantage Bitcoin has over Ethereum is its simplicity. Bitcoin's value proposition is clear and easy to understand: it is a highly decentralized and secure digital store of value that provides holders with reliability.

Ethereum, on the other hand, has a more complex value proposition that is tied to its smart contract functionality and decentralized applications. While this complexity can be appealing to some investors, it also makes Ethereum more difficult to understand and evaluate as an investment, as many of these use cases are in their beginning stages.

For investors looking to keep it simple and wanting to invest in cryptocurrency, look no further than the original digital asset, Bitcoin.

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What's a Better Buy: Bitcoin or Ethereum? - The Motley Fool

A large amount of Bitcoin and Ethereum options contracts are about to expire. Moreover, these events often cause price volatility for the underlying assets.

There has been a significant shift in derivatives trading activity, with Ethereum options trading surpassing that of Bitcoin.

37,000 Bitcoin options are about to expire with a notional value of just over $1 billion. However, this number is eclipsed by the 256,000 Ethereum options that will also expire this month. Their notional value is a whopping $4.8 billion.

Industry analyst Colin Wu commented on the massive shift in derivatives trading.

The Shanghai upgrade is coming, and the trading of Ethereum options has surpassed that of Bitcoin for the first time in more than a month.

Ethereum options are derivatives contracts that allow traders to speculate on the price of ETH. They allow traders to buy or sell Ethereum at a specific price, the strike price, at a certain date of expiry. They are also more flexible than futures which have fixed expiry dates.

According to Deribit, Ethereum Open Interest (OI) stands at almost 2.6 million open contracts that have yet to be settled.

Furthermore, there is a put/call ratio of 1.09 for Ethereum. The put/call ratio is calculated by dividing the number of traded put (short) options by the number of traded call (long) options contracts. A figure higher than 1 is bearish as more traders are buying short (sell) contracts than longs (buy).

The max pain point for Ethereum options is $1,800. This describes the strike price with the most open contracts. It is also the price at which the asset would cause financial losses for the largest number of option holders at expiration.

For Bitcoin options, things are looking a little more bullish with a put/call ratio of 0.51. This suggests there are more long contracts being bought than short contracts.

Additionally, the BTC max pain price is $28,000, pretty close to where the asset is trading at the moment.

Crypto markets have remained flat on the day, with total capitalization hovering around $1.2 trillion. Furthermore, there has been very little movement in the crypto top ten aside from Dogecoin (DOGE), which has dumped 8.6% following Elon Musks Twitter meddling.

Ethereum is currently changing hands for $1,870, cooling from its mid-week and a seven-month high of $1,920.

Further downward pressure could be piled on when all those Ethereum options contracts start expiring this month.

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.

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Ethereum Volatility Likely on the Horizon as Options Expire - BeInCrypto

A venture capitalist who correctly called the 2022 crypto bottom thinks both Bitcoin (BTC) and Ethereum (ETH) are coiling up for a breakout.

Placeholder partner Chris Burniske tells his 257,800 Twitter followers that BTC and ETHs weekly charts are making him too bullish on crypto.

BTC & ETH coiling.

Fellow crypto veteran Raoul Pal, the chief executive of Real Vision, shares Burniskes bullish sentiment regarding Ethereum.

Tasty chart of ETHeventually the 1,850 level will go and it will be fireworks.

Ethereum is worth $1,868 at time of writing. The second-ranked crypto asset by market cap is up 3.74% in the past day and more than 5.1% in the past week.

Bitcoin is trading for $28,164 at time of writing. The top-ranked crypto asset by market cap is up 0.66% in the past 24 hours and nearly 3% in the past seven days.

Burniske said last month that he remains bullish on blockchain and crypto regardless of the macroeconomic landscape.

Im as long crypto as Ive ever been blockchains are critical infrastructure that provides solutions to the problems our society faces, including AI. As a species, we eventually find our way, though the walk is full of sticks and stones. If you look up, there are blue skies.

He also predicted that Bitcoinwould exceed $30,000 and Ethereum would surpass $2,000 in April.

Generated Image: Midjourney

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Crypto Industry Veterans Say Bitcoin (BTC) and Ethereum (ETH) Coiling Up for Breakouts - The Daily Hodl

The BNB Chain rose to prominence as an alternative to Ethereums [ETH] Layer One (L1) blockchain. Although the growth was not without challenges, the chain backed by crypto exchange Binance has been able to cut a significant part of the market share.

How much are 1,10,100 BNBs worth today?

Among both blockchains, Ethereum is the one that has been around longer. But according to Token Terminal, daily active users on the BNB Chain were also three times that of Ethereum. The metric measures users that interact with a protocol during a designated time interval.

While Ethereums active users were around 435,200, BNB Chains outpaced it with a record of 1.2 million. Although the Ethereum L1 blockchain is less centralized than BNB, this rise implied that users would rather opt for the network with faster transactions and cheaper fees.

However, BNB Chains dominance in the aforementioned aspect did not translate to supremacy in every other area. Based on the data from the blockchain financial aggregator, the trading volume of tokens on the Ethereum blockchain was far above those registered on the BNB Chain.

As of 6 April, the volume on the BNB Chain was $601.1 million while Ethereums volume was over $11 billion. This large spread means that there have been more tokens traded via the Ethereum network than BNBs.

Moreover, it seemed that the overall Ethereum ecosystem was hand down beating BNB apart from the user count. According to Santiment, Ethereums development activity witnessed a rise and stood at 51.21. The metric tracks the work done in a projects public GitHub repositories, signaling upgrades on the projects network.

The Ethereum rise in this regard came as no surprise. Lately, the blockchain had passed the Sepolia and Goerli Testnets, as the Shanghai upgrade aimed at enabling staking withdrawals is only days away.

For BNB, it was an entirely different situation. At the time of writing, the chains development activity was flat out at 0.048. This suggested that developers were not actively contributing, despite its recent announcement to improve the chains security.

Realistic or not, heres BNBs market cap in ETHs terms

However, several large ETH transactions have been making rounds with whale accumulating, and some moving into exchanges. According to Lookonchain, a whale who held 900ETH in Tornado Cash address sent all of it into a Bitfinex wallet on 5 April.

There was another whale who has been accumulating the altcoin since 15 January. As of 6 April, this same whale added another $2.4 million bought from Binance, to his bag.

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BNB Chain outshines Ethereums L1 but Shapella reveals that - AMBCrypto News