Journalist
Posted:
- ETH charged $2,400, representing an increase of almost 8% over 24 hours.
- The market may have been reacting to the co-founder’s plans to simplify Ethereum’s PoS mechanism.
Why should Bitcoin [BTC] have all the fun?
After remaining subdued while his senior partner was immersed in festivities, Ethereum [ETH] led the crypto market’s rise in the past 24 hours.
The second-largest cryptocurrency charged $2,400, up nearly 8% over 24 hours at the time of writing, according to CoinMarketCap.
Ethereum is waking up after a dormant period
The rally sparked interest among traders as daily volume soared above $16 billion, according to AMBCrypto’s analysis of Santiment’s data.
Source: Santiment
The pump also caught the attention of whale investors. The number of transactions worth at least a million increased by 52% compared to the day before.
The market may have been responding to co-founder Vitalik Buterin’s plans to simplify the network’s proof-of-stake (PoS) mechanism.
Vitalik’s proposals inspire confidence
In a blog post Last December 27, the crypto czar emphasized the need to remove a systemic complexity arising from the design of the mechanism to support a number of validators.
The first solution he proposed was to abolish solo staking and establish decentralized stake pools as the only way for users to participate in the network.
However, the minimum wagering requirement would be increased to 4096 ETH and the number of validators would be limited to 4096.
The second was a two-tiered approach. In this case, a heavy layer with 4096 ETH requirement and a light layer with small-scale stakers to provide an extra layer of security.
Finally, there was the rotating participation method where a fixed number of validators, approximately 4096, would be chosen for each slot. Although this strategy had advantages over the other two, it risked increasing complexity.
It remains to be seen how the community will respond to these proposals. However, ideas to improve the network’s performance from the horse’s mouth provided an optimistic outlook for ETH.
Read Ethereum’s [ETH] Price forecast 2023-24
ETH becomes volatile
The rally caused a dramatic spike in ETH’s Implied Volatility (IV), according to the options tracking website Greeks.Live. Major IVs such as the 1-month, 3-month and 6-month rose to their annual highs as shown below.
Source: Greeks.Live
For the uninitiated, Implied Volatility is the market’s prediction of a likely move in the price of an asset. This differs from realized volatility or historical volatility, which are based on past price movements.