- Ethereum’s EIP-1559 is scheduled for implementation this July during the London hardfork
- EIP-1559 includes the implementation of a BASEFEE that will be burnt with each transaction
- Burning of the BASEFEE makes Ethereum a deflationary asset
- EIP-1559 coupled with incoming $1,400 stimulus checks, could send Ethereum back above $2k
Ethereum’s EIP-1559 is scheduled for implementation this July alongside the London hard fork. EIP-1559 is designed to solve the issue of high fas fees experienced on the Etheruem network during times of demand by doing the following.
- By implementing a BASEFEE that will be decided by the protocol according to network demand
- The BASEFEE will be burnt with each transaction
- An ‘inclusion fee’ will be added to incentivize miners to process individual transactions
- Transactions will determine the maximum fee (BASEFEE + inclusion fee) that can be paid at a certain time
EIP-1559 Could Send Ethereum Back Above $2k
News of EIP-1559 getting the go-ahead for implementation in July hit the internet on the 5th of this month which also marked a turning point for the price of Ethereum. Before the consensus was reached to implement EIP-1559, Ethereum was trading slightly above the $1,400 support area with the possibility of dipping lower alongside a weakening Bitcoin.
At the time of writing, Ethereum is trading at $1,675 in what looks like a return to bullish territory as illustrated by the daily ETH/USDT chart below.
$1.9T Stimulus Bill Could Send Ethereum Higher
From the chart, it can be observed that the price of Ethereum is back above the 50-day moving average (white) thus hinting of a continuation to higher levels. Additionally, trade volume is in the green with the daily MACD, MFI and RSI hinting of a bullish few days for Ethereum in the markets.
Also worth mentioning is that the US Senate approved a $1,9 trillion stimulus bill that would see eligible residents get up to $1,400 in ‘stimmy checks’. Chances are that the excitement surrounding the stimulus bill will positively affect the traditional markets with ripple effects being felt in the crypto-verse.
This means that Bitcoin, Ethereum and all of crypto will benefit from the new stimulus bill. Furthermore, chances are that the $1,400 will partly or wholly end up buying Bitcoin and other digital assets such as Ethereum. Therefore, Ethereum retesting the $2k price area is very much possible in the days and weeks to follow.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.