Mati Greenspan, senior market analyst at eToro, shared his thoughts on how the US dollar’s recent trends may have had an influence on the cryptocurrency market, leading to the slight uptick in value that most coins have experienced.
He pointed out that the dollar fell against the Turkish lira, the South African rand, and the Mexican peso, making other commodities suddenly more attractive.
“The crypto market also seems to have found relief in the dollar’s pullback. The markets are now seeing some much-needed calm after declines of the past two weeks, which seems to have culminated with Tuesday’s plunge,” he wrote in a message that was sent via email to Cryptovest.
The rebound in the market may have come from a certain amount of optimism, but this only highlights how speculation surrounding Bitcoin and its lack of use as a currency used for buying products may bring about volatility.
Bill Harris, founding CEO of PayPal, went as far as to call it a “colossal pump-and-dump scheme” a few months ago.
On Ethereum’s recent fall in price, Mati Greenspan agrees with Ethereum co-founder Joseph Lubin when he said that he isn’t concerned about these price movements.
“What might prove to be a hindrance, though, is the sheer popularity of the Ethereum network. As we saw with Bitcoin in early December, the Ethereum blockchain is now seeing times of stress as there are more transactions than the miners can confirm in a timely manner,” Greenspan added.
This over-congestion of the Ethereum network might experience some relief if the Casper upgrade comes along anytime soon. This new move would put the blockchain under a proof-of-stake model as opposed to its proof-of-work status quo.
It would effectively make transactions faster by not having to rely on thousands of machines “mining” coins to hash one block, instead speedily choosing block validators automatically. Anything that reduces congestion may very well restore faith in the Ethereum network and increase its credibility as a project.