The CEO of cryptocurrency analytics firm CryptoQuant has revealed he believes Ethereum Improvement Proposal (EIP) 1559 will “be a game-changer” and could help Ethereum overtake Bitcoin’s market capitalization in the long term.
EIP 1559 will see Ethereum reform its fee market with two key changes: one will replace the current gas limit with two values: one equal to it for a “long-term average target,” and another with a hard “per-block cap.”
It will also add a basefee required to be paid in transactions that will be burned instead of paid to miners. IT’s adjusted on a block-by-block basis to keep “average block gas usage” at a “level close to the current gas limit.”
During a wide-ranging interview, Ki Young Ju noted that lowering transaction fees on Ethereum “can solve the blockchain trilemma ”by improving scalability, security, and decentralization. Per the CEO, decentralized finance services and non-fungible token marketplaces are “running with unreasonably high fees.”
If these services were to operate in a low transaction fee environment, he said, network activity would rise, and along with it would the price of the cryptocurrency, he said. When asked about Ethereum and blue-chip DeFi tokens potentially breaking away from Bitcoin’s influence, he said:
I think Ethereum might flip the Bitcoin market cap in the long term, but not this year. This bull run has been driven by the narrative “institutions coming to crypto market”. This trend may last to next year. Without institutional demand, Ethereum can’t flip the BTC market cap.
Ki Young Ju added that earlier this year he met with Goldman Sachs, Fidelity, and other institutional asset management firms, who revealed that they have a hard time explaining what Ethereum and decentralized finance are, so he believes it will take “a few years to build institutional adoption for Ethereum/DeFi projects.”
It’s worth noting the CEO predicted back in February bitcoin’s price would hit $50,000 this year, citing an influx of stablecoin deposits from whales as a bullish signal he was tracking. Ki young Ju has also revealed he has “no doubt” Bitcoin will hit $100,000 this year.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
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