 what is going on YouTube welcome back to Bitcoin daily today we have a special little video that we kind of put together for you guys so we want we've been getting asked questions about Ethereum over and over again you know as far as what do we think it's going to do what price do we think it's gonna go what our predictions are this and that this and that you know what I mean so like I always tell you guys I don't like to make predictions I don't like to predict or try to predict because at the end of the day of prediction is just a prediction it means nothing there's nothing behind it there's no factual evidence behind it you know what I mean so what I'm gonna do though I'm today I'm going I'm gonna list for reasons for very very good reasons why it is possible for Ethereum to go back to all-time highs that it recorded back in 2018 which was around $1400 so that's what we're talking about today I hope you guys enjoyed this video please make sure to subscribe I see a lot of new people along new faces new names please make sure to subscribe hit that like button and share this video with friends family and everything in between I will see you guys at the end of the video enjoy so here are four reasons why Ethereum could hit all-time highs in 2021 the first one is the Ethereum network activity is rising according to the data from etherscan the popular Ethereum block explorer the Ethereum networks user activity is continuously rising on September 17th the number of daily transactions on Ethereum achieved a record high of 1.4 million transactions the previous all-time high was established in January 2018 when the price of Ethereum surpassed $1400 across all exchanges a major contributing factor to the rapid upsurge of user activity on Ethereum has been the active DeFi market for users to send Ethereum or other tokens to and from DeFi protocols to stake or use DeFi services they need to send it through the Ethereum blockchain network as such each token transfer registers as a transaction that is recorded on the public blockchain the increase in total value locked of DeFi protocols means that the number of DeFi users is also rising at a rapid rate consequently the Ethereum blockchain network started to see higher user activity causing daily transactions transaction fees and eventually hash rate to surge the second reason why Ethereum could hit all-time highs in 2021 is because Ethereum 2.0 is supposed to come out very very soon as the Ethereum blockchain network saw significant spike in user activity the network experienced a bottleneck scenario on Ethereum users pay transaction fees to miners in the form of gas to send transactions during peak times gas costs surged to the point where transactions especially staking transactions sometimes surpass $100 per transaction eventually analysts called for scaling on Ethereum and emphasized the importance of Ethereum 2.0 while the substantial increase in user activity is a positive factor the Ethereum blockchain needs to facilitate growth for the network to expand in recent months particularly when yield farming trend hit its peak Ethereum struggled to meet outpouring user demand over time as an anticipation for scaling and higher blockchain capacity grew Ethereum co-creator will firm the roadmap of Ethereum 2.0 Ethereum 2.0 is a critical step towards scaling Ethereum to a larger capacity in essence Ethereum 2.0 would shift Ethereum to a proof-of-state consensus algorithm from the current proof-of-work algorithm currently Ethereum uses proof-of-work like Bitcoin which requires miners to use computing power to verify transactions a proof-of-stake algorithm does not depend on miners as users collectively verify transactions through staking for Ethereum when users stake their ETH they will not be able to use the ETH until they remove it from staking but during the period of staking Ethereum holders would receive rewards for participating in the network to verify transactions and sustaining the proof-of- stake system currently Ethereum is processing between 14 to 15 transactions per second to handle highly demanding applications like DeFi protocols such a transaction capacity is insufficient Ethereum 2.0 substantially increases the capacity up to 6400 times the phases of scaling Ethereum through ETH 2.0 can be explained as a two-step process one sharded roll-ups can achieve 1000 to 4000 transactions per second without ETH 2.0 to sharding with ETH 2.0 can achieve 25,000 to 100,000 transactions per second initially Buterin explained that the ETH 2.0 roadmap had three phases POS sharding then the sharded transaction processing however in a recent statement Buterin noted that sharding can be front run by sharded roll-ups which can happen without ETH 2.0 that way Ethereum scaling can be achieved in two phases rather than three roll-ups would immediately provide 1000 to 4000 transactions per second which would be around a hundred times of the current Ethereum blockchain capacity over time ETH 2.0 would bring the transactions per second to over 25,000 transaction per second through sharding further expanding the blockchain capacity the third reason why Ethereum could hate all-time highs in 2021 is proof of staking once switched over to proof of staking and then you put on top of that the DeFi that means that there will be less Ethereum overall in circulation for Ethereum 2.0 to work users can adopt the role of a validator by staking their ETH to collectively verify transactions on the Ethereum blockchain under the new protocol users would need to commit 32 ETH in the deposit contract to become a full validator consequently the number of addresses holding at least 32 ETH has seen a sudden surge in July of 2020 the launch of ETH 2.0 mainnet requires a locking 524,288 ETH from at least 16,384 validators into one-way deposit contract which would lower the liquid supply of ETH immediately after launch and potentially drive up the price in the short run meanwhile the rise of DeFi has resulted in a large portion of Ethereum supply being locked inside DeFi protocols the amount has climbed back to a little short of 9 million ETH after a slight dip in early November uniswap alone has locked 3.2 million ETH in its liquidity pool between ETH 2.0 and other DeFi activities the ETH's liquidity especially in the period immediately after launch will be significantly reduced potentially creating an upward momentum for ETH price an argument could be made that less Ethereum in circulation could cause less Ethereum to be used in ETH 2.0 hindering the scaling of Ethereum however industry executives including three Arrows Capital CEO Suzu countered that the usage of Ethereum across DeFi actually makes ETH 2.0 more optimistic Zhu argued that more ETH are being withdrawn from exchanges and are being used on chain that raises the overall user proficiency which means fewer users will leave ETH on exchanges and more likely participate in ETH 2.0. Zhu said that the fact that a significant amount of ETH are being withdrawn from exchanges and being used on chain in DeFi raises average user proficiency levels immensely which is bullish for decentralization of staking he added that the idea that everyone will stake on exchanges because of ease is stale the last and final reason why Ethereum could hit all-time highs in 2021 is due to Ethereum's hash rate being at an all-time high in October the hash rate of the Ethereum blockchain network hit an all-time high of 250,000 terahash per second glass node researchers attributed the steep climb to the DeFi hype Ethereum hash rate hits an all-time high Ethereum miners have pushed the hash rate to a new record high in the wake of the DeFi hype and surging fees they explained until Ethereum makes the switch to proof of stake hash rate will remain an important metric to gauge the level of security of the blockchain network hence at least in the near term the record high hash rate of Ethereum is a positive factor for sustainability and security all right guys well i definitely hope you guys enjoyed this video let me know what you guys think in the comments let me know what you think like here's a question of the day guys what do you think about Ethereum will it reach its all-time high will it surpass its all-time high answer that in the comments and i will pick a winner once we get up to 20 likes on this video we will do a free membership giveaway where we give away one free month to our trade room so that you could just make some money that's worth basically a hundred dollars so that's basically it guys if you got any other questions let me know please make sure to subscribe hit that notification bell and i will see you tomorrow on the next video peace and love guys