Ethereum (ETH) price is currently stable after a period of strong volatility. After peaking in late 2021 at a price above $4,800, ETH has undergone deep corrections, followed by a recovery period from lower levels. As of now, ETH still holds the second position in the cryptocurrency market in terms of capitalization, behind only Bitcoin.
Some of the key factors affecting ETH price include the development of Ethereum 2.0, the expansion of decentralized finance (DeFi) applications, and the popularity of non-fungible tokens (NFTs). Ethereum 2.0, which marks the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) mechanism, promises to improve the performance and scalability of the network, while reducing energy consumption. This has attracted great interest from the community and investors, creating positive expectations for the long-term value of ETH.
Additionally, the DeFi and NFT ecosystems on Ethereum are also thriving. DeFi allows users to make financial transactions without going through traditional intermediaries, while NFTs are revolutionizing the way we own and trade digital assets. These advancements have increased the demand for ETH, pushing its value higher.
However, ETH is not without its challenges. New blockchains such as Solana, Cardano, and Binance Smart Chain (BSC) are emerging with alternatives that offer better scalability and lower transaction costs. This puts a lot of competitive pressure on Ethereum, requiring it to continuously innovate to maintain its position.