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Ether Spikes 10% as a Historical Upgrade Rolls Out Today

Ether Spikes 10% as a Historical Upgrade Rolls Out Today

Created by TradeOr

3rd Party Analysis 05 Aug 2021

Key Takeaways

  • Upgrade to the Ethereum network imminent, price keeps steady near $2,700
  • Bitcoin underperforms this week, lower by roughly 4%, ether higher by 1% on the week

Ethereum Slated for Significant Upgrade Today

The Ethereum coin surged $250, or over 10%, on Wednesday as the crypto community anticipated a milestone upgrade to the Ethereum network today. Ethereum, the blockchain powered by ether tokens, is set to undergo one of its most significant upgrades.

Slated for today, according to data from Ethernodes, the upgrade, called London, includes five key improvements. The most popular among them, the Ethereum Improvement Proposal (EIP) 1559, aims to reduce transaction fees by changing the way they are estimated.

An automated bidding system would make sure users on the network will be paying a set fee amount that is defined according to the level of activity. Before the upgrade, users had to guess, or manually bid, how much they should pay to have their transaction approved by miners.

Coin Burn as Part of the EIP-1559 Upgrade

Another major improvement under the same EIP-1559 upgrade will guarantee that a small part of every transaction fee will be burned, or removed from circulation. That will see the number of ether tokens gradually reduce, and could potentially boost its price.

Although analysts say the effects of the upgrades are likely overblown in the short-term, and will become more visible in the long-term, market participants on Wednesday lifted ether’s price from a session low of $2,450 to a close of $2,700, or about 10% gain on the day. Presently, as the upgrade is yet to be rolled out, the Ethereum coin hovers relatively unchanged, trading near $2,700 per coin.

Ether Outperforms Bitcoin This Week

The Ethereum network upgrade has been buoying the price of ether in recent days as it has outperformed even the price movement of bitcoin. This week, ether’s price is higher by about 1%, while bitcoin is lower by nearly 4% for the same period.

More broadly, over the past couple of weeks ether has gained about 55%, while bitcoin has added around 35% to its price.

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