Bitcoin and Ethereum prices have skyrocketed recently, reaching new heights not seen since last summer. However, experts say that the market’s current price surge doesn’t necessarily mean crypto investors should get too excited about the future of cryptocurrency. While proof-of-work blockchains such as bitcoin rely on miners to secure transactions, proof-of-stake blockchains such as Ethereum require users to stake tokens to validate transactions. And while both types of blockchain technology have their advantages, they also each come with unique risks and benefits.
Experts predict that Ethereum could reach $10,000 by 2023. A make-or-break year.’
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Ethereum is one of the best-known cryptocurrencies, and it has become more than just another currency for many investors and enthusiasts. Experts predict its price could increase by up to 400 percent in 2022.
Since its inception in 2015, Ethereum’s native token, ether, has seen an increase in value from $0.311 to around $4,700 today. It has experienced plenty of volatility along the road.
Ethereum was trading above $1,700 on Friday, representing a 707,000% ROI when we wrote this article. Another distinguishing feature of Ethereum compared to other cryptocurrencies is its utility; Ethereum enables developers to create applications, tools, and collectibles.
The blockchain-based technology network has many uses and apps across the tech world, including gaming, music, entertainment, and decentralized finance (DeFI). It was one of the most used cryptocurrencies last year.
Early investors have nearly quadrupled the value of their investments every year since the summer of 2014.
Cryptocurrency prices are notoriously volatile, but financial experts advise against investing at the expense of saving for long-term goals like paying off debts and building an emergency fund. Three months ago (5/8), one month ago (7/7), and one week ago (7/30).
Ethereum’s price has been climbing steadily since its inception. But why? What makes it so special? And what could cause it to skyrocket even further? Read on to learn about some factors driving up Ethereum’s price.
Ethereum Price Predictions
Experts say that ETH’s price is likely to continue rising throughout 2019. However, some experts believe that ETH’s price may become even more volatile than Bitcoin in the coming months since ETH is transitioning from an older, more energy-intensive blockchain protocol to a newer, less energy-intensive one.
Financial planners recommend investing only 1% and 5% of your overall investment portfolio into cryptocurrencies. Despite their growing popularity, the cryptocurrency market is highly volatile, and prices can change dramatically daily.
Experts we spoke with agree that Ethereum could reach $4,000 in the next few years, but some predict it could even go beyond that. A recent Ethereum prediction by an expert at Bloomberg Intelligence suggests it could end the year between $4K and $4,500.
But how high might that price go? It depends on several factors (more on that below) that could affect its long-term value.
The crypto news outlet predicted ETH would end 2022 between $6.5K and $7.5K if the same bullish trend that began in mid-2021 continued. But, 2022 brought a bear market for cryptocurrencies, so it’s clear that Ethereum’s price isn’t going to rise just because people think it should. Plenty of competitors are filling in its gaps right now, and the Ethereum team is working hard to move into its 2nd generation upgrades.
Ethereum has been the only game in town regarding cryptocurrencies, but if its price continues to rise, investors will need to start seeing improvements in demand and functionality.
“I believe Ethereum can reach $8000 by 2022,” Ian Balin, investor and founder of cryptocurrency research and media company TokenMetrics, told NextAdvisory. “Ethereum has been the clear leader among cryptocurrencies, but other blockchains are catching up fast due to its high gas fees and slow transactions.” Coinpedia forecasts a further increase to $12,962 per coin by 2022 if the Ethereum upgrade goes through successfully. The new features could potentially make Ethereum cheaper to use for developers to create products, as right now, its service fees are notoriously high.DateClosing Price (USD)
What Influences Ethereum’s Price
Ethereum was the first blockchain to use “smart contracts,” essentially programmed instructions on the blockchain that automatically perform financial transactions using algorithms.
New Ethereum alternatives are hitting the market, changing the demand for ETH. Here are some factors that influence its price.
High Traffic and Utilization
Smart contracts made it easy for artists and creators to create their digital artworks called Non-Fungible Tokens (NFTs), which were both a blessing and a burden for Ethereum, as its popularity led to what some called a “blockchain bottleneck.” Imagine the mall parking lot on Thanksgiving Day only digitally.
With so many users, it has become increasingly expensive to transact using ether. Ethereum developers responded by developing new upgrades to their infrastructure, but it took them several years to develop the technology needed.
While some newer projects have built their blockchains, others have added layers on top of the Ethereum network. These Layer 2s run on the Ethereum network and offer different features than the original protocol. Additionally, there are now several L1 chains that claim to be better than the original chain.
Investors should note that more people using the ethereum network means more support for its value, so competitors pulling users from the network could hurt Ethereum’s value over the long run.
First Mover Advantage
Despite the new competition from newer and greener technologies, experts say Ethereum’s “first mover advantage” has placed it in a strong position for long-term success. But because cryptocurrencies are only valuable because of their communities’ commitment, the commitment of its users is more important than having them be first.
Ethereum is well positioned to grow as its user base grows and meets new demands for smart contracts.
Ethereum could quickly increase its capacity if it wanted to. However, right now, the Ethereum community seems fine with waiting to see whether it wants to.
Competition From ‘Ethereum-Killers’
If “cryptocurrency” and “blockchain” become household words by 2021, “web 3” might be able to take off in 2022. Web 3 refers to an open access version of the Internet built on blockchain technology, which would allow people to own most of the infrastructure used online.
Companies like Ethereum and similar blockchain projects like Cardano, Solana, and Tezos are working to develop an infrastructure for the next generation of web applications and services. Investors saw these new technologies as similar to the Dot Com Boom when Google, Facebook, Apple, etc., first became publicly known.
“In 2022, we’re going to see the next generation of the Internet.”
The Future of Ethereum
Ethereum has been experiencing significant price fluctuations, but there’s an overall feeling that the original smart contract platform will survive these challenges.
Ethereum has over 90 percent of the non-fungible token (NFT) market, which means there is an excellent chance that its price will rise again soon.