Will Ethereum Surge in December?

Ethereum (CRYPTO:ETH) is already bouncing back towards all-time highs after a mid-November drop, and more news could see it hit a new high this month.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published December 1, 2021 12:30 pm EST

It looks like the dip in cryptocurrency may be over. After a number of cryptocurrencies fell around in mid-November, shares of digital tokens, including Ethereum (CRYPTO: ETH), started to rally. After falling about 17%, Ethereum shares are now back towards all-time highs. This could lead to a major surge in December, on the back of several pieces of good news for Motley Fool crypto enthusiasts.

Companies sign off on crypto

Cryptocurrency continues to gain traction, as company after company allows customers to use digital tokens. Ethereum can now be used for everything from making purchases online to buying theatre tickets. Yet there is, of course, an insane amount of room to grow.

While it remains in the shadow of Bitcoin, Ethereum continues to hold the second-highest spot among cryptocurrency tokens. It’s created a massive amount of wealth in a short period of time, and companies want in on that. And it’s not just companies allowing the token’s use that has investors interested.

Major investment firms on Wall Street have also added cryptocurrencies, including Ethereum, to their investment portfolios. With exchange-traded funds (ETFs) now allowed in the United States, this creates a strong position for another major boost in December and beyond for Motley Fool investors.

Enter an upgrade

Now, that’s good news for cryptocurrency as a whole, but what about Ethereum specifically? Investors have been waiting patiently for the rollout of Ethereum 2.0. It’s expected to hit the network in mid-2022, but there could still be an announcement that sends shares surging in December.

That could be the announcement that The Graph will be used as the data storage solution. Ethereum would need Zero Knowledge (ZK) rollups to reduce fees for Ethereum users, possibly long term. This comes from the very high gas fees on the current network. ZK rollups have a better data compression system, making them ideal for Ethereum 2.0. Instead of having to see the entire blockchain data to see that the Ethereum is true, it allows one party to validate the block almost immediately.

Co-founder Vitalik Buterin suggested the company could use The Graph to store and provide historical data on demand from its servers. This would hopefully decrease costs and increase transaction speed to above its current 30 transactions per second. Management believes this should jump to 3,000 transactions per second when implemented.

Foolish takeaway

Even without the rollout of Ethereum 2.0, it’s likely the cryptocurrency will continue to increase over December. An announcement about The Graph and further bullish sentiment of crypto in general are great indicators that a boom is on the way this holiday.

Shares of Ethereum are up 285% year to date.