Ethereum Price Prediction for 2021, 2022-2025 and Beyond

2020-12-30

Ethereum Price Predictions: 2021 and BeyondJana Kane

Various cryptos are trying to overthrow ETH. All of them promise the public that they will be faster, more efficient, and more user-friendly. None, however, come close to the popularity of Ethereum. This won’t change in 2021 either, because exciting things are planned. Which ones? Keep on reading! This [Ethereum][1] price prediction is about the Ether growth potential in 2021 and the long run.

The article covers the following subjects:

Ethereum in Short

Like Bitcoin, Ethereum is a separate blockchain that has its own digital currency. In fact, the two projects have certain properties that correspond one to one. For example, both coins are decentralized. No country or government backs Bitcoin or Ethereum. Furthermore, both digital currencies are built on blockchain technology so that all transactions are fast, accurate, and transparent.

However, this is where the similarities end. Ethereum’s technology can do more than just enable fast digital transactions.

For example, Ethereum offers smart contract technology. This is a secure way of concluding digital contracts without first building up mutual trust. Ethereum transfers are also faster than Bitcoin’s, and its blockchain technology can handle more transactions than Bitcoin’s.

Most people buy Ethereum on a speculative basis. That means that people invest in the crypto coin to make money from it.

Importance of the Network Effect

The biggest advantage of Ethereum is the network effect. It is the first and, therefore, the [most popular][2] blockchain for smart contracts. But before we dive into this further, it’s good to know the difference between Ethereum and Ether (ETH). These terms are often used interchangeably.

By Ethereum, we mean the network and the blockchain. You can find all transactions of a cryptocurrency on a blockchain. And on Ethereum, transactions are paid with ETH. That is the cryptocurrency that comes with Ethereum. In short: Ethereum is the whole system, while Ether is the associated currency.

A Little History of Ethereum

Unfortunately, even we don’t have a crystal ball. Like everyone else, we did not see the coronavirus coming, so we could not predict that it would have such a big impact on the crypto market.

In 2017 and early 2018, the price of ETH grew almost exponentially. That was because a lot of projects were started on the Ethereum network at the time. This was done through Initial Coin Offerings (ICOs). These projects all had their own coin. As an investor, you could participate in these projects by sending them ETH. In exchange, you received these new tokens. ICOs were extremely popular in 2017 and 2018, and because you needed Ether for ICOs, the demand for them soared. Due to that demand, the price rose to unprecedented heights.

The era of ICOs is over. Regulators have taken care of that. Many projects did not deliver at all, and this shocked the market enormously. Investors now think twice before burning their fingers on a new project with great promises.

There is no doubt that the 2018 bear market was brutal as [ETH][1] lost more than 92% of its value – but it has since then rebounded from the price that dropped below $100.

The Ethereum blockchain remains unquestionably the most robust smart contract platform out there. Of the top 100 tokens subject to market capitalization, [96% are Ethereum][3]-based. Of the 1,000 best tokens, 89% consist of Ethereum.

Two Important Developments in 2021

Two major developments can push the course of Ether to new heights. The first is the introduction of a new algorithm called proof-of-stake. The second one is the development of DeFi.

Ethereum 2.0

With the renewal of Bitcoin’s historic high, all attention is riveted on it: volumes and interest are growing, and new institutional investors are coming. However, crypto investors with a long-term planning horizon prefer Ethereum 2.0: the project already reached the TOP-30 in terms of capitalization.

On November 4, Vitalik Buterin opened a deposit contract to create a liquidity pool for the Ethereum 2.0 network. At the moment, crypto investors have reserved 1.7 million ETH.

Image source: etherscan.io

The ETH 2.0 blockchain upgrade is not currently presented on rating resources since it will take several years before the network is fully deployed. Validators reserve funds in blocks of 32 ETH to participate in staking. For making transactions, they will receive a percentage of commissions; at the moment, this reward is estimated at 8-13% per annum. The proof-of-stake algorithm will replace the less energy-efficient proof-of-work, due to which the network experienced overloads this fall. And investors will receive new coins in exchange for old Ethereum in a 1: 1 ratio. A reverse transition is not possible.

Image source: StormGain

At the end of this year, Bitcoin grew by 233%; during the same time, Ethereum soared by 404%. Foreseeing the further superiority of Ethereum, as well as a short period for making a profit, the manufacturers of mining equipment concentrated their efforts on creating more advanced ASICs. The network hashrate will soon update its historical maximum.

Image source: etherscan.io

Ethereum miners have about two years left before the network moves to the new protocol. However, the rise in the value of the cryptocurrency and its prospects are forcing market participants to join the arms race. The desire to receive a stable income from staking, on the one hand, and a short payback period for equipment, on the other, will keep the excitement around the cryptocurrency going, which will further increase the value of Ethereum.

DeFi

A very important development in recent times is the growth of DeFi. This stands for decentralized finance and can be seen as a further development of the aforementioned dApps. DeFi companies are service providers that provide loan services on the Ethereum blockchain, for example, where only a smart contract is required for the export.

Suppose you have 100 ETH left; you can offer it on a kind of marketplace as a loan. Someone else can agree to this; the conditions are poured into a smart contract, and the borrower offers collateral. Nothing more is needed.

Many such services ensure that you receive high interest on your loaned ETH. And by high, we mean interest that our parents talk nostalgically about.

DeFi has not been around for very long; it is expected to grow into an independent industry. Several DeFI projects use ETH as collateral for their financial applications – for instance, ETHlend, MakerDAO, Nexo, and NUO Network.

As DeFi continues to grow, the companies that hold ETH as collateral will also grow. So, it’s a great idea to keep an eye on Ethereum updates!

The Introduction of Sharding

“Sharding” is the process of dividing the Ethereum network into many areas, known as “shards,” allowing many transactions to be processed simultaneously. Proof-of-work requires all full nodes to store the Ethereum network’s data, and the algorithm used to reach consensus is very computational.

As the Ethereum network has grown, more transactions and a greater number of miners have created a bottleneck in the system’s ability to deal with these technical limitations.

Sharding is one way of addressing this problem by distributing data and transaction processing functions among different nodes within the network. All nodes no longer need to store all data and process all transactions. Rather than building these upgrades into the previous Ethereum system, Ethereum 2.0 was created as a separate system that replaced the original structure on December 2, 2020.

Suppose the changes implemented by Ethereum 2.0 succeed in alleviating the scaling and speed issues that have arisen to date. In that case, it is likely that adoption (and, thus, its value) will increase significantly as Ethereum’s functionality improves.

Ethereum in 2021

ETH, like the rest of the market, is at the center of Bitcoin’s price action. So, when Bitcoin starts a bull run, ETH can also hope for it.

With the pandemic outbreak, the world hibernated for a few months, and it negatively impacted cryptocurrencies, causing Bitcoin to go downhill as we recorded even 40% daily losses. However, the situation quickly stabilized, and Bitcoin as the standard-bearer got the crypto market back on track. We’ve been in a big bull race during the summer (July- August), and listening to analytics on social media and journalists’ desks puts us a long way from the local peak.

As long as Bitcoin is in the lead and moves up, ETH will usually do the same. ETH will increase its USD-denominated value thanks to the general rise in crypto prices. The ratio between ETH and BTC is likely to decline. Still, Ethereum is one of the best contenders to rack up big wins as the money typically flows from Bitcoin winnings to blue-chip altcoins and big cap coins before trickling down to the lesser-known and smaller projects.

Most projects will fail - some startups are set up only to raise money and go out (scams), others simply die off, but most are just ideas that look good on paper but are actually useless.

As a result, more than 95% of successful ICOs and cryptocurrency projects will fail, and their investors will lose money. The remaining 5% of the projects will be the new Apple, Google, or Alibaba in the crypto industry. Will ETH be part of this 5%? It’s very likely.

Ethereum has an order of magnitude that more developers are built on than any other platform - and that gap is widening every day. That means that if another blockchain platform wants to beat Ethereum in terms of developer adoption, it won’t be enough to match Ethereum’s level - it must surpass Ethereum’s growth rate in the future. If you don’t have developers building applications on your blockchain, you are essentially creating a ghost town.

The blockchain platform, on which most developers develop real-world applications, will be the platform with the widest mainstream adoption. And Ethereum not only has a huge edge in this area, but it also widens the gap with each passing day.

What Experts Predict

Ethereum supporters were excited about the upcoming launch of Ethereum derivatives on the CME. Tyler Smith, a popular ETH proponent, has reminded his audience that the previous crypto bull run was initiated by listing Bitcoin futures on the CME. He [believes][4] the launch of Ethereum derivatives could have a similar outcome on the blockchain ecosystem.

Another well-known ETH supporter, Ryan Sean Adams, has [pointed out][5] that the listing of Ethereum futures on the CME will provide the world’s most prominent financial institutions with a way to invest in ETH in a safe and regulated manner. Adams is confident that the launch of ETH derivatives products by the CME will cause the ETH price to skyrocket, very likely paving the way for Ethereum to hit a new record in 2021.

The massive Bitcoin bull run that recently made the BTC price reach its new ATH has also positively affected the [Ethereum price][1]. After the announcement of ETH 2.0 launch, the [Ethereum price][6] passed $625, hitting its all-time high since 2018, and the most popular altcoin continues to rise in value.

Ethereum Technical Analysis

Early in the trading day on 12/29/2020, ETH/USD offset some of its gains from last Thursday by declining to $710.53 – it is down by 2.58% intraday, thus snapping a 5-day uptrend.

When we factor this into the bigger picture: even though overbought RSI conditions led to the crypto’s pullback after a high that lasted 31 months, a 5-week ascending trend line and bullish MACD favor the bulls. Regardless, ETH’s recent weakness sets $700 as imminent support. Accordingly, ETH/USD bulls may choose to look for a fresh position near $690 – but May 2018’s high of $830 might become their short-term, overall target.

The Future of ETH: 2023, 2025, 2030 Predictions

Ethereum Price Prediction for 2023

With great brand exposure in one of the most sensible uses of the blockchain dApps platform, ETH is optimally positioned to remain a top cryptocurrency, right behind Bitcoin. With a potential Bitcoin-induced bull run, it is possible to hit the previous all-time high of $1400.

Ethereum Price Prediction for 2025

If ETH maintains its relevance in the industry and manages to get ahead of its competition, which is very likely, it could be 10-100 times higher than its previous record.

Ethereum Price Prediction for 2030

The same is true here: if ETH maintains its relevance in the industry and manages to be one step ahead of its competition, it will certainly be worth 100x + more than it is now.

Realistic Ethereum Prediction

Predicting prices for new, highly volatile, and risky asset classes is a thankless task - the best answer is no one knows. The reasonable assumption is that the realistic ETH price will be somewhere between the current price and it’s all-time high for the foreseeable future.

ETH Historical Price Changes

We can’t simply make price predictions without looking back. Currently, ETH is traded at $748.18. Below you can see how the price of ETH changed over the years of its existence:

Is Ethereum (ETH) a Good Investment?

Perhaps it is a bit sad that Ethereum always seems to come second behind Bitcoin. Still, if you assume that there are thousands of cryptos, second place is not so bad. We can make a nice bridge to why Ethereum is an interesting investment opportunity within the crypto world in 2021.

Ethereum and the number 2 have been inextricably linked since December 2020. Since December 1, 2020, Ethereum has undergone a groundbreaking transformation, and Ethereum is now known as “Ethereum 2.0”.

In short, the main upgrade of Ethereum 2.0 over Ethereum 1.0 is in its scalability. Ethereum 2.0 uses the technique of sharding for this. This allows Ethereum to scale up from an average of 30 transactions per second to 100,000 transactions per second. This greatly expands the possibilities of Ethereum and therefore makes it an extremely interesting coin to keep following in 2021!

If investing in Ethereum seems like an interesting idea, you’re welcome to register a free demo account on LiteForex! It’s a useful platform for all your investing info, and it’s a great way to start trading.

Month (2020)

Rate Forecast

MIN Rate

MAX Rate

Changes, %

—|—|—|—|—

Jan

720.03

436.17

944.68

53.83 %

Feb

855.14

622.41

1 100.65

43.45 %

Mar

914.52

811.94

1 019.36

20.35 %

Apr

886.00

667.51

1 015.85

34.29 %

May

838.35

611.89

1 048.01

41.61 %

Jun

889.60

784.16

1 070.55

26.75 %

Jul

990.93

836.71

1 127.45

25.79 %

Aug

952.18

790.78

1 159.77

31.82 %

Sep

914.55

626.60

1 081.53

42.06 %

Oct

884.23

731.52

1 058.56

30.89 %

Nov

878.66

587.72

1 159.71

49.32 %

Dec

926.93

679.43

1 072.68

36.66 %

Ethereum Price Prediction FAQ

** Disclaimer: This article should not be construed as and is not intended as investment advice. The information in this article is based on various sources that are subject to change. Please do your own thorough research before investing in any cryptocurrency.**

Price chart of ETHUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

Rate this article:

( {{count}} {{title}} )

my.liteforex.com/trading/chart?symbol=ETHUSD
www.upgrad.com/blog/Ethereum-smart-contract/#:~:text=Ethereum%20is%20hence%20a%20decentralized,the%20development%20of%20smart%20contracts.
www.coingecko.com/en
twitter.com/R_Tyler_Smith/status/1339595410466250759
www.bitcoininsider.org/article/99757/cme-group-launch-Ethereum-futures-february-pending-regulatory-approval
Coinmarketcap.com/currencies/Ethereum/

Posts