The digital currency has brought huge gains to growth investors but can Ethereum reach $50,000? Let's take a look at experts price predictions.
Ethereum (ETH) hit new highs in the third week of February 2021 but has failed to maintain its bullish momentum in the last week of the same month. Due to huge sell-off by investors and a dip in form of parent crypto, Bitcoin, which has affected the whole crypto stratosphere, Ethereum’s price has fallen and its trading at a current price of $1,558 having increased by 23.43% in the last 24 hours.
After Bitcoin crossed $50,000 for the first time in February, many investors and experts believe ETH must achieve the same heights. With other altcoins such as Binance Coin (BNB) competing strongly in the Decentralized Finance Space, will Ethereum be the second crypto to reach $50,000?
“Ethereum is going to solidify its place as the future substrate of the global digital economy by underwriting the world’s contracts in 2021” were the words of crypto analyst Andrew Keys in December 2020. The analyst considers Bitcoin (BTC) as digital gold and Ethereum (ETH) as digital oil. It seems his predictions were spot on as BTC crossed $50,000 and Ethereum crossed $2,000 in February 2021 with a bright future ahead as a result of its market potential.
Ethereum is facing a difficult week but such a scenario was expected after the crypto asset soared to new price milestones. The digital currency has brought huge gains to growth investors and experienced traders as well as novice investors who purchased ETH months or years ago as part of a crypto trading trial with the goal of seeing the cryptocurrency grow into hundreds of dollars someday.
Every investor has a price goal on which they are willing to let an investment go. Fortunately for these investors, the spike in Bitcoin’s (BTC) price coupled with the insatiable interest of traders with regards to Decentralized Finance (DeFi), their ETH’s price crossed $2,000.
Many of them used gold as a template of disinvestment as the metal also crossed $2000 and settled at an all-time high price of $2,067.15 on 7th August, 2020 and has been trading below the price milestone ever since. Once that price goal ($2,000) was reached, the best thing to do was to let go of an asset when its demand or interest far and wide surpassed the need to still hold onto it for an unforeseen future due to the volatility trends of the whole crypto space.
Ethereum’s dip in its bullish form has been attributed to a huge sell-off in the market. Evidently, in an interview with Bloomberg Television, Chief Executive Officer of cryptocurrency exchange, Kraken, Jesse Powell, pointed out that “A plunge of more than 50 percent in Ether’s price was not caused by a trading-engine malfunction but by extreme selling”. He added that there is a huge chance that a multiple Ether holder who could not believe the huge windfall Ethereum had brought him or her, decided to sell all of it, convert it to fiat currency and carry on with his or her life”.
Selling off Vitalik Buterin’s novel coin which is used in making transactions on Ethereum’s platform closes the traders mind by cutting off trade emotions or feelings of FOMO (Fear of Missing Out) on a huge spike in price at a later time. The seller freed him or herself of a subsequent drop in prices which could have led to the question, why didn’t I just let it go at my earliest convenience?
“Notwithstanding what these last three business days of trading have done to the crypto space in terms of wiping off huge gains, it has not deterred investors a single bit” says Lynn Thomasson of Bloomberg. Why will people fret in fear when they have profited massively from the soaring of the prices of crypto in the last few months? Her comments have been confirmed by Mr. Powell of Kraken cryptocurrency exchange who is seeing a five times increment in the number of new clients who have started to patronize digital assets on his platform.
Overall, as an investor, you must thoroughly do your own research and understand what blockchain technology and its protocols are before deciding to invest a huge sum of your money in order not to suffer huge losses. Although the market looks a bit down in the last week of February after such a strong start to the month, this is what crypto trading is all about.
Any investor who is shocked by the turnout of events (gains today and then losses the next day) has not followed the pattern of digital asset investments for a long time. Crypto is traded in speculation and “right timing” is everything you need to know as an investor.
Suppose a huge corporation announces in the last days of February just like Elon Musk and Tesla did with their $1.5 billion investment in Bitcoin (BTC), an asset they have adopted to be used as an additional option of payment for their products, coins are going to rally and this will spread across the whole finance sector.
Such spread demonstrates the level of trust traders have for a digital coin. If more organizations which have gained grounds in business throw huge sums of money into a coin, it means there is a potential in that cryptocurrency they (as small-time traders) are experimenting with. This changes the asset's price patterns and soon losses will instantly be erased.
Currently, “sellers have control of the market since they are willing to let the assets go at a price which will satisfy their financial goals”, according to Nick Cawley of Daily FX. This follows the laws of demand and supply, whereby the greater the supply of a product (ETH), the lesser the demand for it (at that trading price of $2,000 or more) which has resulted in a fall of its price (trading between $1,400 and $1,600). Major coins have lost more than 20% of their value due to the bearish outlook of the crypto market.
Inasmuch as such a trend looks negative for amateur investors, it’s extremely positive for experienced traders. As prices are falling to correction points, digital assets are going to become relatively cheaper for purchase. The demand for ETH as part of the 210 DeFi protocols running on its blockchain coupled with gas fees for Ether transactions which has reached a new high of $39 will see more gains recorded in the long term. This will set the blockchain with the highest number of DeFi protocols on its way to hitting different milestones with $50,000 as its prime target.
What Determines Ethereum’s Price?
Ethereum, unlike Bitcoin BTC which normally sees prices being determined by the forces of demand and supply (whatever price people are willing to pay), the smart contract network extensively depends on several factors such as the trading of its novel token “ether” which is used to pay gas fees needed for processing transactions.
Additionally, as part of Decentralized Finance (DeFi), Ethereum controls 94.6% of the whole space with 210 projects running on its network. Popular among these are Decentralized Finance Exchanges (Uniswap and SushiSwap), Decentralized Insurance Platform (Nexus Mutual), Decentralized Lending (Compound), Yield Aggregator (yearn. finance) and Payment Solution and Service Provider (Celer Network).
At the time of writing, as per data retrieved from Etherscan, the number of transactions successfully processed on the network in the last 24 hours was 1.303m. More than $37bn in value has been locked in Decentralized Finance (DeFi) applications and the whole Ethereum digital economy as per data sourced from analytics DeFi protocol “DeFi Pulse”.
Ethereum rides on diversification of its protocols which has “high user interest” based on trade volume. The fall in price of one asset does not mean that the entire Ethereum network is about to go into extinction mode.
Evidently, in the last 24 hours, Index Coop. which has over $116.1m in locked funds was trading at $23.31 having shed 4% of its price value in the last 24 hours.
Other assets have not experienced Index Coop’s fate and in the last 24 hours, Aave is up 13% trading at $387.65, Compound is trading at $443.73 up by 19%, Maker is up 17% and is trading at $2,355.45, Nexus Mutual (NXM) has increased by 7.5% and was trading at $62.62, Yearn Finance had increased 6.47% from $29,882.97 to $35,133.22. Decentralized exchanges SushiSwap had increased by 6.94% and were trading at $14.75 while Uniswap was up 7% after hitting 24 hours lows and it’s currently trading at $26.31.
As planet earth runs on contracts and Ethereum through its blockchain network allows contracts to go digital, every fiber of the global economy will soon be digitized. Ethereum in this scenario has a great opportunity in the not-so-distant future to upgrade the entire economy of the world and not just a single set of assets.
The launch of Ethereum 2.0 provides more features in terms of scalability (through point-of-stake) which processes more transactions in seconds, complexity (which increases security) and interoperability on the part of smart contracts.
We are on the verge of seeing an explosion of layer 2 solutions which will take the whole blockchain space to a different game in the financial world. Luckily, as an ETH trader, your asset will play an integral role in the whole process.
The connective tissue of the world is contracts and if medical prescriptions, college acceptances, insurance policies, sales contracts, employment offers and non-disclosure agreements run on blockchain technology, then Ethereum will revolutionize not only the telecommunications, legal, social media, healthcare, education and e-commerce industries but the whole transaction economy. This places ETH on a path where the crypto asset will surpass BTC to become the digital oil and gold of digital finance and surpass the $50,000 price milestone held by parent crypto, Bitcoin.
Price Predictions: Can Ethereum Reach $50,000?
Ethereum is poised to reach numerous price milestones. Strategists for Fundstrat Global Advisors LLC, David Grider has said that “Ethereum is the best risk/reward investment play in crypto”. His views stem from the numerous functions Ethereum performs where it does not have to rely on its novel token “ether” or a single protocol for the determination of the digital asset’s entire price. Mr. Grider foresees Ethereum climbing more than sevenfold to $10,500 after reaching record highs in the third week of February 2021.
Simon Dedic who is a co-founder of Blockfyre and Managing Partner at Moonrock Capital estimates that “In the not-so-distant future, Ethereum will be worth more than $9,000”.
In an article posted on the Times of India which was keenly monitored by Trading Education, Chief Executive Officer (CEO) of ZebPay, Rahul Pagidipati said that “Normally, Ethereum tends to follow Bitcoin''. In interpreting his statement, Mr. Pagidipati sees the price of ETH increasing to the heights of BTC since other altcoins follow the same direction as its elder crypto sibling in bull runs and bearish declines. He added that “Nearly 3 million ETH which is represented in fiat currency as $3.8 billion has been locked up for long-term staking, removing them from the buyable supply”.
Staking is a process whereby holders of coins (in this case ETH) actively participate in a process called transaction validation which is similar to mining on a proof-of-stake blockchain. Under such blockchain, holders of coins which meet the minimum requirements of a specific cryptocurrency are selected and have rights to validate transactions.
You may have had another definition of staking (betting, gambling or wagering) but you have been extensively educated on “staking” as a term under the umbrella of crypto trading and investing. Removing the buyable supply comes with higher prices since demand exceeds supply.
Ethereum will reach certain price milestones before hitting $50,000. James Todaro of Blocktown Capital is of the view that “Someday, Ethereum’s value will surpass $9,000”. Mr Todaro’s analysis is primarily centred on fundamentals which could see the smart contracts blockchain become the second cryptocurrency to surpass the $1 trillion market capitalization mark by benefiting from its Decentralized Finance trend through its protocols which have a huge user base.
Chief Executive Officer (CEO) Of BuyUcoin, Shivam Thakral is of the opinion that “Bitcoin is consolidating and this is the main reason Ether is touching record valuation. Investors are looking to ETH as the second most popular and by market cap to make great returns on their investments in the long term”.
Brian Schuster is the founder of Ark Capital and is of the belief that “Ethereum as a result of its control of the DeFi world and the potential of revolutionizing the digital world will hit $100,000 by 2024.
Crypto Valley Member, Prime XBT has reported that there will be huge gains in the next few years and a bearish season like what happened to BTC will also come ETHs way and see the crypto skyrocket to levels traders never thought possible.
According to the trading company, Ethereum’s price as at the year ended 2021 could be $25,000, increase to $27,000 in 2022, go through a bearish period and drop to 52-week lows of $7,200 in 2023. With a decrease in price, ETH will fall into the price levels of several investors and the greater demand for the most dominant blockchain in the DeFi space will see its price skyrocket and hit a new milestone of $100,000 in 2025.
In the process, it will become the first crypto to achieve that feat and become the largest crypto by market capitalization due to its limited supply which is more than five times the maximum supply of Bitcoin.
Don't Miss: Ethereum Price Prediction
Is Now a Good Time to Buy Ethereum?
There is not a better time. There are many traders who look at the current price of BTC and bury their face in their hands. How could this be possible? Why did I opt out when it was trading around $3,800 in March 2020? There are novice, semi-professionals, professionals, class traders and legacy (expert) traders and some of them although made huge profits on their investments, shed tears here and there.
Ethereum is the king of Decentralized Finance (DeFi) and as more protocols are added to its platform in the near future which has a strong user base that will reflect in massive trade volume numbers, the price of the crypto asset will increase tremendously in the process.
For years, there have been numerous Layer One (1) blockchains which have been developed and unfortunately for those amateur developers, marketed themselves as “Ethereum Killers”. Many of such blockchains promised a faster and sophisticated smart contract platform but disappeared into the wind as idea conception and execution is not the same.
Going forward, there are numerous developers and investors who will like to get in on the act and take advantage of the numerous opportunities available through Decentralized Finance (DeFi). Naturally, this will see Ethereum lose a small percentage of upcoming projects. As Andrew Keys of CoinDesk puts it, “Even as new open-source ecosystems emerge around these other protocols all roads will lead back to Ethereum as the base settlement layer”.
With the successful launch of Ethereum Futures in 2021 on the largest derivatives exchange in the world (Chicago Mercantile Exchange), the digital asset becomes only the second Commodity Futures Trading Commission-registered crypto commodity and this in the not-so-distant future clears the path for Ethereum Exchange Traded Fund.
This is the right time to buy Ethereum because it is trading at a price level which makes it affordable. According to Brian Schuster of Ark Capital, The digital asset as a result of its control of the DeFi world and the potential of revolutionizing the digital world will hit $100,000 by 2024.
Virtual currencies are highly volatile. Your capital is at risk.
Where Can I Invest in Ethereum?
Bill Gates once said, “If your business is not online, then your business will soon be out of business”. Despite the numerous questions people have asked with regards to running businesses online, one of the wealthiest men knew early on that the future of the world was heading online through the power of digitization.
There are numerous individuals who are too conventional to embrace change and feel crypto investing can only be viewed in Incognito Mode or on an Internet Protocol address that cannot be traced. Unfortunately, that statement does not hold any water as crypto can be traded on several online brokerages which have received business certificates and license of operations by governments in the United States, the United Kingdom among others.
One such brokerage we at Trading Education will recommend for you is eToro. The platform has been providing financial and copy trading services since 2006 and has close to 1000 employees. eToro has offices in Australia, the United Kingdom and the United States.
Creating an account and making your first Ethereum purchase on eToro is a relatively easier process when compared to other platforms.
First and foremost, “SIGNING UP” is the term used online when creating a profile.
The next step is to provide your full name, email address and telephone number which are the REQUIRED DETAILS needed to set up your account. Please ensure that the information you provide confirms your identity since several anonymous individuals try to compromise high-frequency trading platforms in the form of hacking. You will be verified thoroughly.
As part of company policy, after you have provided the appropriate details, you will be directed to upload documentation that proves the information you input into the company’s system. This process is called “Knowing Your Customer” (KYC) and all brokerages as well as betting sites rely on this process. This is to ensure that there are no credit card frauds or compromise of accounts of customers who used online payments systems such as PayPal, Skrill, Neteller and Rapid Transfer to upload funds.
After going through a successful verification phase, the next step is to DEPOSIT MONEY (fiat currency) into your account. The preferred payment methods are Credit/Debit Cards, PayPal, Neteller, Skrill, Rapid Transfer, iDeal, Klarna / Sofort Banking, Bank Transfer and Local Online Banking.
Once the deposit has been successfully completed, simply navigate to Ethereum’s page and MAKE YOUR FIRST ETH PURCHASE which will be processed and deposited into your account.
Ready To Invest In Ethereum ETH?