Upcoming Constantinople Hard Fork Could Drive Ethereum Price Up
The much anticipated Ethereum Constantinople hard fork has been scheduled for January 16, 2019, at the block height of 7,080,000.
The new Ethereum blockchain entails a range of new Ethereum Improvement Proposal (EIP) implementations, with the purpose of further improving the Ethereum network. Exchanges, such as Bithumb, OKEx, Huobi and DragonEx, have already shown their support for the impending hard fork.
Crypto assets platform Gate.io released a research report on the impact of Ethereum hard fork, claiming that the ETH price fluctuations caused by previous ETH hard forks are relatively similar. “The positive hard fork usually causes a certain degree of price rise. However, it is hardly to determine whether the market price is falling back before the fork or after it,” according to Gate.io.
As the report put it, the impact caused by the Ethereum hard fork on the market can be divided into three phases:
- Before the hard fork, the ETH price tends to post some gains within a certain period of time, even has a positive impact on the market. This reflects that the market on the whole is bullish on the prospects of Ethereum’s technical improvement after the hard fork
- Before and after the Ethereum hard fork time point, the price of Ethereum faces a peak period in the short run. The price change during this period remains uncertain. Meanwhile, this stage also serves as the inspection period of the market for hard forks, reflecting the market’s shift in stance before and after hard forks
- After the inspection period, the Ethereum price sees some pullbacks, representing that the market tends to restore rationality after a cooling-off period
Alex Krüger, a well-respected crypto expert, said on Twitter that the Ethereum Constantinople hard fork could have a huge impact on the ecosystem. “Constantinople will reduce the block rewards from 3 to 2, decreasing new ETH supply accordingly.”
Seeing that a drop in supply would increase the $67 breakeven to $101 and wipe out a lot of miners, Mr. Krüger further explained that “the increase in breakevens is not bullish on itself. Price does not follow breakevens, and in crypto breakevens do not represent a floor. However, once mining is past the initial (painful) adjustment period, less mining supply mined by fewer miners will be decidedly bullish.”
Ethereum managed to beat Ripple and regain its spot as the second largest cryptocurrency by market cap on January 2. It also posted an incredible 80% gain over a 30-day period.