The Ethereum 2.0 update is just days away and there is certainly a lot of excitement about the changes that will come with it. For example, the network will have better-scaling capabilities, faster transactions and will transition to a proof-of-stake consensus model.

The update comes at an ideal time considering that the Ethereum network has been so congested lately due to increased network adoption. The scaling and congestion problems have become more pronounced with the rise of non-fungible tokens or NFTs. It is reminiscent of the congestion that took place during the CryptoKitties boom back in 2017.

NFTs and DApps are some of the main causes of the congestion on the network. Fortunately, the upcoming major update will introduce better scalability, speeds, and overall efficiency on the Ethereum network, thus making it more attractive for new projects. The number of users on the network is expected to increase exponentially after the update, thus driving more value for the network. More transactions will cause more demand for gas and ETH, which in turn generate more growth and value for the two tokens.

If the Ethereum network continues to conform to Metcalfe’s law, then we will likely see Ethereum continue to grow due to higher demand, and here is a bit of a breakdown of how that will happen. Most DeFi DApps that exist today such as Compound, Synthetix, and Maker Dao run on the Ethereum network.  The DApps are powered by ETH which is locked into their smart contracts. The number of DeFi DApps will likely increase if Ethereum 2.0 takes off, and this will lead to more demand for ETH to be taken out of circulation so that it can be locked into smart contracts. Such a turn of events will lead to more demand for Ethereum as its market supply reduces, which will in turn cause higher prices.

Higher ETH and Gas values present another challenge, especially for network users. They will make it more expensive to use the network over time, but fortunately, these factors have been considered and will be addressed using the Ethereum Improvement Proposal (EIP)- 1559 which was approved and will be implemented later this year.

Meanwhile, Ether appears to be regaining its bullish momentum and is currently trading at $2,858 which represents a 6.01% gain in the last 24 hours and a 2.54% gain in the last 7 days.

ETH is moving higher from its May low of $1728, which means it has already recovered by more than $1,000 after the previous consolidation. Its current bullish run has already broken through the $2755 Fibonacci level where it experienced some resistance in the last two days. It is currently targeting another key Fibonacci level at $3071 where it should also gain some resistance.

Interestingly, the current bull run is taking place with lower volumes, which means we could see a more pronounced upsurge with higher volumes. ETH still has a long way to go before it reaches its latest all-time high of $4372. However, the upcoming developments including the Ethereum 2.0 launch will provide numerous conditions for a stronger rally on ETH, which means it will likely yield new all-time highs in the future.

The upcoming Ethereum update will fundamentally change the network making it more efficient. The update will allow it to take full advantage of the high demand for the network, thus making it possible to capture more value. These changes will certainly benefit the value of Gas and Ethereum, meaning there could be some good times ahead. Investors should however be cautious because another market crash can neutralize those short-term gains.