Coin Market

Ethereum’s (ETH) path back to $2.5K depends on 3 key factors

Published

7 days ago

March 26, 2025

Ether (ETH) price reclaimed the $2,000 support on March 24 but remains 18% below the $2,500 level seen three weeks ago. Data shows Ether has underperformed the altcoin market by 14% over the past 30 days, leading traders to question whether the altcoin can regain bullish momentum and which factors might drive a trend reversal.

Ether/USD (left) vs. total altcoin capitalization, USD (right). Source: TradingView / Cointelegraph

Ether appears well-positioned to attract institutional demand and significantly reduce the FUD that has limited its upside potential. Critics have long argued that the Ethereum ecosystem lags behind competitors in overall user experience and still offers limited base-layer scalability, which has negatively impacted network fees and transaction efficiency.

Will the Ethereum Pectra upgrade impact ETH price?

Many of the Ethereum network’s challenges are expected to be addressed in the upcoming Pectra network upgrade, scheduled for late April or early June. Among the proposed changes is a doubling of the data that can be included in each block, which should help lower fees for rollups and privacy-focused mechanisms. Additionally, the cost of call data will increase, encouraging developers to adopt blobs—a more efficient method for data storage.

Another notable improvement in the upcoming upgrade is the introduction of smart accounts, which allow wallets to function like smart contracts during transactions. This enables gas fee sponsorship, passkey authentication, and batch transactions. Additionally, several other enhancements focus on optimizing staking deposits and withdrawals, providing greater flexibility, and extending block history for smart contracts that rely on past data.

Arthur Hayes, co-founder of BitMEX, set a $5,000 price target for ETH on March 25, stating that it should significantly outperform competitor Solana (SOL).

Source: CryptoHayes

Regardless of the rationale behind Arthur’s price prediction, ETH options traders do not share the same bullish sentiment. The Sept. 26 call (buy) option with a $5,000 strike price costs only $35.40, implying extremely low odds. However, Ethereum remains the undisputed leader in smart contract deposits and is the only altcoin with a spot exchange-traded fund (ETF) in the US, currently holding $8.9 billion in assets under management.

Ethereum TVL growth and reduced ETH supply on exchanges

Ethereum’s network boasts a total value locked (TVL) of $52.5 billion, significantly surpassing Solana’s $7 billion. More importantly, deposits on the Ethereum network grew 10% over the past 30 days, reaching 25.4 million ETH, while Solana saw an 8% decline over the same period. Notable highlights on Ethereum include Sky (formerly Maker), which saw a 17% increase in deposits, and Ethena, whose TVL surged by 38% in 30 days.

Ether balance on exchanges, ETH. Source: Glassnode

The Ether supply on exchanges stood at 16.9 million ETH on March 25, just 3.5% above its five-year low of 16.32 million ETH, according to Glassnode data. This trend suggests that investors are withdrawing from exchanges, signaling a long-term capital commitment. Similarly, flows into spot Ether ETFs remained relatively muted on March 24 and March 25, in contrast to the $316 million in net outflows accumulated since March 10.

Lastly, the Ethereum network is gaining momentum in the Real World Asset (RWA) industry, particularly after the BlackRock BUILD fund surpassed $1.5 billion in capitalization. The Ethereum ecosystem, including its layer-2 scalability solutions, accounts for over 80% of this market, according to RWA.XYZ data, underscoring Ethereum’s dominance in the decentralized finance (DeFi) space.

Ether’s price drop below $1,900 on March 10 likely reflected overly bearish expectations. However, the tide appears to have turned as the Ethereum network demonstrated resilience, and traders continued to withdraw from exchanges, setting the stage for a potential rally toward $2,500.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Coin Market

Bitcoin can hit $250K in 2025 if Fed shifts to QE: Arthur Hayes

Published

50 minutes ago

April 2, 2025

Bitcoin may still rise to over $250,000 before the end of the year, with expectations of an increasing fiat supply remaining the significant catalyst for the world’s first cryptocurrency.

Bitcoin’s (BTC) 2025 price rally may be boosted by the US Federal Reserve pivoting to quantitative easing (QE), when the Fed buys bonds and pumps money into the economy to lower interest rates and encourage spending during difficult financial conditions.

“Bitcoin trades solely based on the market expectation for the future supply of fiat,” according to Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom.

Hayes wrote in an April 1 Substack post:

“If my analysis of the Fed’s major pivot from QT to QE for treasuries is correct, then Bitcoin hit a local low of $76,500 last month, and now we begin the ascent to $250,000 by year-end.”

The Fed reduced the Treasury runoff cap to $5 billion per month from $25 billion effective April 1, while keeping mortgage-backed securities (MBS) runoff steady at $35 billion.

The Fed may allow the MBS roll off without replacement and the excess principal payment might be reinvested into Treasurys, according to comments from Fed Chair Jerome Powell published by Reuters.

“Mathematically, that keeps the Fed balance sheet constant; however, that is treasury QE. Bitcoin will scream higher once this is formally announced,” added Hayes.

Other analysts are eying a more conservative Bitcoin price top based on BTC’s correlation with the global liquidity index.

BTC projected to reach $132,000 based on M2 money supply growth. Source: Jamie Coutts

The growing money supply could push Bitcoin’s price above $132,000 before the end of 2025, according to estimates from Jamie Coutts, chief crypto analyst at Real Vision.

Fed will “flood the market with dollars”

Hayes has been “buying Bitcoin and shitcoins at all levels between $90,000 to $76,500,” showcasing his conviction in the crypto market for the rest of 2025. The pace of capital deployment will increase or decrease depending on the accuracy of his predictions.

“I still believe Bitcoin can hit $250,000 by year-end because now that the BBC has put Powell in his place, the Fed will flood the market with dollars,” wrote Hayes, adding:

“That allows Xi Jinping to instruct the PBOC to stop tightening monetary conditions onshore to defend the dollar-yuan exchange rate, which increases the net quantity of yuan.”

Despite the optimistic prediction, many market participants are betting on a lower Bitcoin price top for the end of 2025.

Source: Polymarket

Only 9% of traders have placed bets on Bitcoin hitting $250,000, while 60% expect Bitcoin to hit $110,000 in 2025, according to Polymarket, the largest decentralized predictions market.

Still, Bitcoin and global risk appetite remain pressured by global tariff fears ahead of US President Donald Trump’s upcoming tariff announcement, scheduled for April 2.

“Long-term positioning remains intact, but near-term momentum appears tethered to unfolding macro headlines,” Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, told Cointelegraph.

Magazine: Bitcoin’s odds of June highs, SOL’s $485M outflows, and more: Hodler’s Digest, March 2 – 8

Coin Market

Nakamoto coefficient explained: Measuring decentralization in blockchain networks

Published

2 hours ago

April 2, 2025

Measuring decentralization in blockchain

Decentralization involves spreading control and decision-making across a network instead of a single authority.

Unlike centralized systems, where one entity controls everything, decentralized blockchains distribute data among participants (nodes). Each node holds a copy of the ledger, ensuring transparency and reducing the risk of manipulation or system failure.

In blockchain, a decentralized network provides significant advantages:

Security: Decentralization reduces vulnerabilities associated with central points of attack. Without a single controlling entity, malicious actors find it more challenging to compromise the network. Transparency: All transactions are recorded on a public ledger accessible to all participants, fostering trust through transparency. This openness ensures that no single entity can manipulate data without consensus. Fault tolerance: Decentralized networks are more resilient to failures. Data distribution across multiple nodes ensures that the system remains operational even if some nodes fail.

So, decentralization is good, but it’s not a fixed state. It’s more of a spectrum, constantly shifting as network participation, governance structures and consensus mechanisms evolve.

And yes, there’s a ruler for that. It’s called the Nakamoto coefficient.

What is the Nakamoto coefficient?

The Nakamoto coefficient is a metric used to quantify the decentralization of a blockchain network. It represents the minimum number of independent entities — such as validators, miners or node operators — that would need to collude to disrupt or compromise the network’s normal operation.

This concept was introduced in 2017 by former Coinbase chief technology officer Balaji Srinivasan and was named after Bitcoin’s creator, Satoshi Nakamoto.

A higher Nakamoto coefficient indicates greater decentralization and security within the blockchain network. In such networks, control is more widely distributed among participants, making it more challenging for any small group to manipulate or attack the system. Conversely, a lower Nakamoto coefficient suggests fewer entities hold significant control, increasing the risk of centralization and potential vulnerabilities.

For example, a blockchain with a Nakamoto coefficient of 1 would be highly centralized, as a single entity could control the network. In contrast, a network with a coefficient of 10 would require at least 10 independent entities to collude to exert control, reflecting a more decentralized and secure structure.

Did you know? Polkadot‘s high score on the Nakamoto coefficient is largely due to Polkadot’s nominated proof-of-stake (NPoS) consensus mechanism, which promotes an even distribution of stakes among a large number of validators.

Calculating the Nakamoto coefficient

Calculating this coefficient involves several key steps:

Identification of key entities: First, determine the primary actors within the network, such as mining pools, validators, node operators or stakeholders. These entities play significant roles in maintaining the network’s operations and security.Assessment of each entity’s control: Next, evaluate the extent of control each identified entity has over the network’s resources. For instance, in proof-of-work (PoW) blockchains like Bitcoin, this involves analyzing the hashrate distribution among mining pools. In proof-of-stake (PoS) systems it requires examining the stake distribution among validators.Summation to determine the 51% threshold: After assessing individual controls, rank the entities from highest to lowest based on their influence. Then, cumulatively add their control percentages until the combined total exceeds 51%. The number of entities required to reach this threshold represents the Nakamoto coefficient.

Consider a PoW blockchain with the following mining pool distribution:

Mining pool A: 25% (of the total hashrate)Mining pool B: 20%Mining pool C: 15%Mining pool D: 10%Others: 30%

To determine the Nakamoto coefficient:

Start with mining pool A (25%).Add mining pool B (25% 20% = 45%).Add mining pool C (45% 15% = 60%).

In this scenario, the combined hashrate of mining pools A, B and C reaches 60%, surpassing the 51% threshold. Therefore, the Nakamoto coefficient is 3, indicating that collusion among these three entities could compromise the network’s integrity.

Did you know? Despite Bitcoin’s reputation for decentralization, its mining subsystem is notably centralized. The Nakamoto coefficient is currently 2 for Bitcoin. This means that just two mining pools control most of Bitcoin’s mining power.

Limitations of the Nakamoto coefficient

While the Nakamoto coefficient serves as a valuable metric for assessing blockchain decentralization, it possesses certain limitations that warrant careful consideration.

For example:

Static snapshot

The Nakamoto coefficient provides a static snapshot of decentralization, reflecting the minimum number of entities required to compromise a network at a specific point in time.

However, blockchain networks are dynamic, with participant roles and influence evolving due to factors like staking, mining power shifts or node participation changes. Consequently, the coefficient may not accurately capture these temporal fluctuations, potentially leading to outdated or misleading assessments.

Subsystem focus

This metric typically focuses on specific subsystems, such as validators or mining pools, potentially overlooking other critical aspects of decentralization. Factors like client software diversity, geographical distribution of nodes and token ownership concentration also significantly impact a network’s decentralization and security.

Relying solely on the Nakamoto coefficient might result in an incomplete evaluation.

Consensus mechanism variations

Different blockchain networks employ various consensus mechanisms, each influencing decentralization differently. The Nakamoto coefficient may not uniformly apply across these diverse systems, necessitating tailored approaches for accurate measurement.

External Influences

External factors, including regulatory actions, technological advancements or market dynamics, can influence decentralization over time. For example, regulatory policies in specific regions might affect the operation of nodes or mining facilities, thereby altering the network’s decentralization landscape.

The Nakamoto coefficient may not account for such externalities, limiting its comprehensiveness.

To sum up, the Nakamoto coefficient is useful for assessing certain aspects of blockchain decentralization. It should be used alongside other metrics and qualitative assessments to gain a comprehensive understanding of a network’s decentralization and security.

Coin Market

7-Eleven South Korea to accept CBDC payments in national pilot program

Published

2 hours ago

April 2, 2025

South Korea’s 7-Eleven stores will accept payments in the country’s central bank digital currency (CBDC) until June, as the retailer participates in the test phase of its CBDC project.

The convenience store chain will reportedly provide a 10% discount on all products paid for with CBDC during the test period. According to Moon Dae-woo, head of 7-Eleven’s digital innovation division, the company is making an effort to incorporate digital technology advancements in its operations.

The executive added that the company’s participation in the CBDC test will help accelerate the firm’s digital transformation.

Many stores will participate in South Korea’s CBDC testing phase, which runs from April 1 to June 30. The project also involves 100,000 participants who will be allowed to test payments using CBDC issued by the central bank.

Central bank digital currencies are digital assets issued by government agencies. Like other digital assets, CBDCs offer faster and more modernized payment features. However, unlike Bitcoin and other privacy-focused tokens that offer certain levels of anonymity, CBDCs are controlled and monitored by governments.

South Korea tests CBDC from April to June

On March 24, government agencies including the Bank of Korea, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) announced the CBDC test.

Participants can convert their bank deposits into tokens stored in a distributed ledger during the test period. The tokens hold the same value as the Korean won.

The government agencies said citizens aged 19 or older with a deposit account in a participating bank could apply to take part. Registrations were limited to 100,000 participants. KB, Koomin, Shinhan, Hana, Woori, NongHyup, IBK and Busan are among the banks participating in the CBDC tests.

Apart from 7-Eleven, participants can use their CBDCs in coffee shops, supermarkets, K-Pop merchandise stores and delivery platforms. However, users will be limited to a total conversion limit of 5 million won ($3,416) during testing.

The Bank of Korea first announced the retail CBDC testing for 100,000 users in November 2023 and was originally scheduled to begin in the fourth quarter of 2024. The FSS said the country’s CBDC test represents a step toward creating a prototype for a “future monetary system.”

Magazine: Ridiculous ‘Chinese Mint’ crypto scam, Japan dives into stablecoins: Asia Express