The Future of Ethereum: Will ETH's Price Rise or Fall?
The highly anticipated London Hard Fork is set to launch on the Ethereum mainnet on August 4, 2021, as a stepping stone to Ethereum 2.0 integration sometime in 2022. This begs the question: Is Ethereum going to be more sustainable? How will these upgrades impact the future price of Ether (ETH), in addition to the nerve-wracking bear market?
Compared to Ether’s price peak ($4,326) on May 12, the price has plummeted over 50% amidst the China crackdown on cryptocurrencies, changes in government regulations, overall market sentiment, and worldwide crypto acceptance. While some investors choose to off-load their assets, some see the dip as a discount and a buying opportunity.
While the solid foundation and the upcoming projects Ethereum plans to roll out may be perceived as a forthcoming breakout trend, it all boils down to the acceptance of crypto in general.
That said, based on past performance, Ether’s price is predicted to reverse its downward trajectory. The incipient upgrade involving burning ETH coins (“gas fee“) after each transaction alongside the proof of stake (PoS) consensus could serve as a “triple Ethereum halving” that ultimately surpasses the issuance rate of a new coin. This would potentially boost the ETH price further according to supply and demand. The growing adoption of both the Ethereum blockchain and DeFi should also contribute further to its demand.
While investing in crypto during the bear market isn’t for everyone, here’s what you need to piece the market sentiment and Ethereum together before diving into investing.
What Are Ethereum and Ether (ETH)?
Launched in 2015, Ethereum is an open-source digital asset run on a decentralized platform. Its founder, Vitalik Buterin, aims to revolutionize cryptocurrencies beyond just payment technology. Ethereum’s blockchain runs on its native self-enforcing programming language, Solidity, and allows developers to create smart contracts and build decentralized applications (DApps). Technology has been utilized which is contributing to the recent rise in non-fungible tokens (NFT).
ETH is Ethereum’s native token, dubbed “the king of altcoins,” with a market cap of over $286 billion. ETH is commonly used to pay for transaction fees and computational services. Developers can write smart contracts that receive, hold and send ETH, while users can send ETH to one another.
Ethereum is innovative in its fundamentals and structure, as it supports the deployment of code of any algorithmic complexity. This is perceived as a revolutionary step in the advancement of distributed ledger technology.
Where Is ETH in the Market Cycle Now?
Cryptocurrencies are speculative and volatile, and market turbulence is not a surprise to many investors. ETH indeed took a hit from the bear market, but it’s not the worst it has seen. Back in 2018, Ethereum’s price had plummeted over 95% from around $1,200 to $380 in April of that year.
Altcoins, including Ether, usually follow the price trail of Bitcoin. That means when Bitcoin’s price crashes, everything else tends to follow. Still, cycles are a natural event in any market, which helps traders and investors to gauge trends. For example, Bitcoin’s price has fallen over 50% to a new low of $29,807 on July 21 from its all-time high of over $64,000. This drop from its all-time high could indicate that the markdown and accumulation stage is ending and entering a markup stage.
Since altcoins usually follow BTC’s trend and BTC is showing a mini mark-up trend, this suggests ETH could be in the same stage, confirming the previous accumulation phase indicating a bullish trend is coming. Still, the market cycle is subject to interpretation, and ETH’s value is usually determined by the inception of the blockchain, related projects, and the news. The uptrend could also be due to the anticipation for the upcoming London Hard Fork.
Retrospective: ETH Growth and Projections
Ethereum was created to be far more versatile than Bitcoin. The powerful tokenization, complex decentralized applications and decentralized fundraising campaigns are among Ethereum’s greatest strengths.
Looking back to 2017, the explosion of initial coin offerings (ICOs) realized Ether’s potential. Many users and developers used it as the primary funding mechanism for crowdfunding projects. As more projects turned to the Ethereum ERC-20 standard for their tokens and Ether gained popularity, speculation on the adoption of tokens grew — and so did Ether’s price.
ETH All-Time High
In 2018, the market saw Ether reach its all-time high of $1,412 on January 10. However, it wasn’t until 2021 that ETH went bull again, reaching its all-time high of $4,362 on May 7. When looking at growth charts, ETH generally traded at a consolidation price of $300 across 2020, until the recent bull runs in early 2021. Over 40 of these projects made it to the top 100 cryptocurrencies by market capitalization.
During the Bitcoin breakdown in 2019, the ETH price took a significant hit, bringing the price for each coin down to $132. This marked a 30% drop in value for the cryptocurrency as the coin’s market cap value stood at the $13.98 billion level at that time. However, despite the sudden price drop, ETH managed to find some form of support. In fact, it shows bullish prospects after the collapse and could soar again when Ethereum 2.0 is fully rolled out.
Upcoming Ethereum Projects
The year 2019 was indeed pivotal for Ethereum in terms of development, achievements and the growing popularity of its market-reigning decentralized applications, or DApps.
Although there were no significant changes in ETH price, it showed signs of recovery from the deep and repeated sell-offs throughout 2018.
Fast-forward to 2020. Ethereum reclaimed its status as the world’s best-positioned smart contract platform to date. A slew of contributing factors included the global COVID-19 pandemic and subsequent economic recession. While DeFi was giving rise to decentralized autonomous organizations (DAOs), ETH rose to a new high. For all of these reasons, ETH possesses plenty of upsides, potentially in the near, mid, and long term.
Although Ethereum 2.0 was scheduled for the end of 2021, the development has been delayed and is supposed to roll out sometime in 2022. The first phase of the planned upgrade will enact Ethereum’s shift to proof-of-stake (PoS) consensus, which will allow Ether holders to stake ETH. By securing ETH in the blockchain in exchange for block reward payments, ETH stakers can benefit from the annual yield. In the end, this will also improve ETH’s economic bandwidth.
Despite the delays, the development team is working on the official launch of Ethereum 2.0 step-by-step, which involves:
- Istanbul Hard Fork — Went live on December 7, 2019. This hard fork is Ethereum Improvement Proposal (EIP)-driven, focusing on the clients’ API and contract standards, including EIPs152, 1108, 1344, 1884, 2028 and 2200. This rollout also serves as a stepping stone for Ethereum 2.0.
- Serenity Phase 0 — Launched on Dec 1, 2020, the technological implementations are split into the Beacon Chain, PoS consensus and validator nodes.
- London Hard Fork — Launching on Ethereum’s mainnet on Aug 4, 2021, featuring five EIPs that aim to optimize the risk and reward dynamics. These upgrades involve implementing EIP 1559 to improve transition wait times and facilitate more predictable gas fees.
- Sharding Framework Phase 1, Phase 1.5 and Phase 2 are scheduled to go live in 2022.
What Is the ETH Price Now?
Ethereum started 2020 at $130 per coin, but continued to surge as the general cryptocurrency market gained uptrend momentum. On Jan 5, 2021, ETH’s price spiked, surpassing $1,000 after Vitalik Buterin provided reassurance to the cryptocurrency community via the scheduled launch of Phase 0 of Ethereum 2.0. Alongside the crypto bull run in the first half of 2021, ETH continued its uptrend. In April 2021, ETH finally broke the $2,000 barrier and soared to its all-time high of $4,362 on May 12, following the growing interest in DeFi and NFTs.
The Impact of DeFi on ETH Price
DeFi has grown by almost 400% in less than two years in terms of dollars locked up as crypto collateral. Ethereum, the backbone of this new financial ecosystem, currently has 9.8 million ETH locked up in DeFi.
While the world experienced considerable economic turmoil in 2020–2021 due to the global coronavirus pandemic, decentralized finance markets largely weathered the economic storm. This could indicate a more significant impact on Ethereum than the ICO in 2017.
As DeFi reached a few critical milestones between 2020 and the present, the number of new DeFi assets topped 1,000. The upshot? Its user base hit an all-time high of nearly 200,000 in the first month. DeFi has now taken the shape of a complete financial ecosystem, and its economic bandwidth is scaling with over $7 billion in stablecoins. Half of that value is locked away in ERC-20 tokens built on Ethereum.
As ETH 2.0’s launch draws closer, the correlation between DeFi and Ethereum remains high. It is expected that locking in DeFi may give a much-needed boost to the cryptocurrency. In addition, the upcoming hard fork will further confirm the rollout of Ethereum 2.0.
Ethereum’s Future on Scalability and Profitability
Another crucial factor that drives Ethereum’s adoption and popularity is its unifying standards, which simplify integration into the Ethereum network. The Ethereum network has been plagued with bottleneck scalability issues for a long time, due to increased usage on the network. This has resulted in severe congestion, with transaction fees growing significantly. The upcoming ETH 2.0 update is expected to resolve current issues with scalability.
According to Buterin, “The network is looking forward to the future of Ethereum scaling,” which includes sharding that will be introduced with the forthcoming ETH 2.0. This new function will accelerate Layer 2 techniques 100x. This, combined with Ethereum’s relation to DeFi, is potentially a significant value driver for ETH — provided that the DeFi space doesn’t surpass Ethereum’s capacity and moves away onto a different blockchain.
In the meantime, the upcoming Ethereum halving (London Hard Fork) on August 4 only means that its value will grow, promising that demand will surpass supply. Yet only the future can tell how high Ethereum will go.
ETH Price Prediction: 2021 and Beyond
Forecasts of Ethereum’s future price movement have to consider both external and internal factors.
For the moment, the most critical aspects remain Ethereum’s long-awaited transition from Bitcoin’s proof-of-work concept to proof-of-stake (PoS) consensus and the phenomenal upcoming DApps, DAOs, and DeFi projects on the decentralized network. Considering these fundamental factors, Ethereum price prediction looks positive for 2023 and even to 2025.
What Do the Experts Say?
There is a consensus among experts that the ETH price outlook will remain bullish in the next few years. According to insights from leading crypto sources like Cointelegraph, Ethereum should experience a breakthrough in 2021. However, bumps are inevitable, due to the nature of crypto volatility.
According to the Finder app’s technical analysis, Ethereum will go as high as $4,500 by the end of 2021. Token Metrics’ Senior Cryptocurrency Technical Analyst, Forrest Przybysz, thinks Ethereum will be worth $8,000 by the end of 2021. But some technical analysts predict ETH may only reach another new all-time-high (ATH) in the following years. Generally, the future of Ethereum is looking good in terms of its value and prospects.
Ethereum (ETH) Price Prediction for 2023
The fate of Ethereum’s ATH path is tied to its association with the billion-dollar DeFi space. The upcoming London Hard Fork upgrade is another significant factor that will play a central role in the rise of Ether’s value. All in all, predictions for Ethereum’s growth are bullish, with its value climbing and the price potentially receiving a heavy boost. We will expect a strong capitalization and consequently a substantial value-per-coin increase following the EIP upgrades.
Hence, the bullish trend is likely to continue, perhaps until 2023. That expectation is based mainly on the increasing interest of institutional and retail investors and the weakening of the global economy.
Here are two Ethereum price predictions:
- TradingBeasts predicts ETH will go up to $3,394.847 by December 2023.
- Long Forecast thinks ETH will reach $7,125 by the end of 2023.
ETH Price Prediction for 2025
While 2025 is another peg on the board in expected milestones for the second-most popular cryptocurrency, the forecast for ETH indicates positive long-term growth, based on market data, historical charts, and current developments. If Ethereum retains its growth patterns, there’s room for its value to reach $9,000 by 2021, based on reviews by James Todaro, CEO & Managing Partner at Blocktown Capital. This price projection is calculated and analyzed with technical analysis and considers historical ETH price movements.
With the recent bear market, ETH’s price dip below $1,700 could be seen as an opportunity to enter the crypto market at a time preceding historical changes which hold massive potential. As both scarcity and demand continue, investing in and trading ETH will become more lucrative.
There is speculation that the current growth rate within the Ethereum ecosystem is calling for “flippening” — whereby Ethereum overtakes Bitcoin by market cap when the PoS algorithm is fully rolled out. But it all boils down to how successful Ethereum 2.0 upgrades are, as well as the overall adoption by the public.
Here are some of the price predictions:
- Walletinvestor.com is making bullish predictions on Ethereum’s price, perhaps over $12,000 by 2025.
- Cryptocurrency panels that have weighed the survey on Finder think that ETH is a good investment, possibly going as high as $17,810 by 2025.
The Bottom Line
As the cryptocurrency market continues to mature and merge with the traditional finance sector, it will give way to the new phenomenon of DeFi. Naturally, Ethereum will garner more and more interest from institutional investors in the future, which makes Ethereum a good investment.
Though cryptocurrencies remain volatile, ETH is becoming a staple in the portfolio of retail and institutional investors and traders alike. As the crypto community waits for the necessary changes to the Ethereum blockchain, the increasing use of DeFi projects is already fueling ETH’s value. The future of Ethereum is certainly looking positive.