Lark Davis reveals 7 reasons to keep holding ETH until its a multi-trillion dollar asset
ETH is currently hovering around $1,900 after losing more than 50 percent of its value to fall from an all-time high of over $4000. With many uncertainties surrounding the market, Lark Davis, a popular YouTuber and crypto influencer believes there are good reasons to keep holding the asset or buying the dip. In his latest video, he explained seven important factors to hold the asset till it hits $1 trillion in market cap.
Increase in ETH financial products
Ethereum has shown an incredible sign of impending bull-run with positive news coming from its Exchange-Traded Fund (ETF) approvals. Canada and now Brazil have approved Ethereum ETFs with multiple applications filed with the US Securities and Exchange Commission (SEC) pending approval.
Approval will unleash a tsunami of money into Ethereum. For perspective, Brazil makes up 1 percent of the global equity market, Canada with 2 percent of the global equity market as well as the USA with 54 percent of the global equity market.
Davis analyzed that smaller economies approved gold ETF before the US did, and this caused a seven-year straight bull-run with a 400 percent surge. This could be the case for Ethereum.
King of innovation
According to Davis, Ethereum is the king of innovation in crypto.
The implementation of the multiple layers 2 reveals the innovation aspect of Ethereum.
Also, Uniswap, the biggest decentralized exchange on Ethereum has just announced their integration of optimism for scaling. “This kills the Ethereum killers.” The innovation aspect of the platform could have a positive impact on the price.
The ETH Triple halving
Another important reason to keep holding Ethereum is the upcoming triple halving. Its annual inflation is currently 4.5 percent, but the implementation of the ETH 2.0 will reduce it to 0.5 percent. This will be an equivalent of three times the Bitcoin halving.
The Ethereum you have will be a scarcer asset since there will be less inflation on the network moving forward.
The upcoming EIP-1559
According to Davis, EIP-1559 will be implemented in August. This will burn the fees paid for some transactions, and will make the asset a deflationary currency.
Basically, EIP-1559 is an automated perpetual stock buyback mechanism.
Davis also mentioned that Ethereum is moving from the energy-hungry Proof-of-Work (PoW)) consensus mechanism to the Proof-of-Stake (PoS) mechanism.
This will fundamentally change the economics from a mine and dump economy to a stake and hodl economy.
Most importantly, it will address the environmental issues and conserve more than 99 percent of the energy which has been a major topic in the crypto ecosystem.
Demand for ETH
As demand for Ethereum continues to rise, supply on exchanges keeps hitting a new low. Davis estimated that the amount of Ethereum locked in the 2.0 contract continues to grow with over 6.2 million ETH locked.
Ethereum crashes Bitcoin in metrics
Davis pointed out that Ethereum is outpacing Bitcoin in several metrics. For instance, the platform is settling three times more transactions than Bitcoin every day on-chain. Ethereum is settling more than $25 billion every day compared to the $8 billion for Bitcoin. Also, Ethereum is crashing Bitcoin in terms of fees.
Uniswap is collecting more in fees than Bitcoin. The top 13 coins by total fees collected have about 10 Ethereum applications.