Ethereum 2.0 Sees High Deposit Rate as London Hard fork Looms

Ethereum 2.0 investors are all geared up as the deposit rate into the network’s contract address has increased of late.

According to Data from CryptoQuant, the number of accounts that deposited 32 ETH into the smart contract surged to over 4,000 following the latest major correction of the cryptocurrency.

The increased bet on the future of the Ethereum blockchain comes as the next major upgrade in the network, the London hard fork is set to go live on August 5. The increased deposit rate, which typically reduces the supply of Ethereum on spot exchanges, is also set to complement the unique features that are billed to be introduced by the London hard fork.

The expected upgrade will introduce a new fee structure that will see users of the network pay a base fee for transactions against the old model in which miners determine fees. Besides this rent control structure, the upgrade, also known as the EIP 1559 upgrade, will limit the supply of Ether through periodic token burning. 

The confluence of increased ETH 2.0 deposits and an impending hard fork launch spells a bullish sentiment for the Ethereum supply and demand outlook.

While this is billed to have a good bearing on the token price, the bears currently appear to be on a sell-off spree in what seems like a move to lower price to get a good discount post EIP-1559 upgrade launch. At the time of writing, Ethereum was trading at $2,483.34, down 5.01% in the past 24 hours, according to CoinMarketCap. 

The current price is a sharp decline from the earlier 7-day high of $2,695.43 printed yesterday, a plunge that spells a healthy retrace. The current bullish fundamentals the Ethereum blockchain is billed to experience are poised to stir a new price rally in what may usher prices back toward the $3,000 to $3,500 price range in the near to medium term.

Image source: Shutterstock