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Macro investment strategist Lyn Alden outlined a factor that could catalyze the growth of Ethereum (ETH) in 2022.
In her opinion, the amount of ETH locked in the Ethereum 2.0 contract serves as an optimistic indicator for the second largest cryptoasset by market capitalization.
I am observing blocking in the Ethereum contract. They launched Beacon Chain about a year ago and are in a one-way staking deal. Once you block the coins, they will be there until something changes or merges.
So, one thing I’m looking at is that Bitcoin is leaving the exchanges pretty quickly, and Ethereum is leaving the exchanges faster than it goes into this contract.
Essentially, an illiquid supply is forming, and as long as it persists, this is a pretty strong bullish variable … there are over 8 million ETH in this contract and we are approaching 9 million.
The Etherscan observer reveals that crypto investors have blocked 8,793,458 ETH worth $ 35.43 billion in a smart contract. Those who invest their ETH in a smart contract are aiming to become validators for the next Ethereum iteration.
At the same time, the strategist notes that Ethereum could face a massive sell-off once ETH is unlocked.
The merger is a welcome development for Ethereum, as the update represents a move towards a proof-of-stake consensus mechanism. This is expected to take place in the first or second quarter of 2022.
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