How does Ethereum compare to other Cryptocurrencies?
There are many cryptocurrencies available in the market apart from Ethereum. One notable competitor of Ethereum in the crypto market is Bitcoin. The battle has been there for a while, and it has now been termed the Bitcoin flipping battle of Maximalists. In 2017 Bitcoin and Ethereum market capitalizations were not that different. This data can be found on the coin market cap, and Ethereum’s market cap was $34 billion, while the Bitcoin market cap was $41 billion. There has been a clear divergence since 2017, but bitcoin dominance continues to decrease. Investors have seen this as an opportunity to invest in Ethereum instead of bitcoin. Another cryptocurrency worth noting is Dogecoin, and this cryptocurrency has come from nowhere. It is hard to predict in most cases as research alone is not enough to help you. Sometimes emotions play a role in guiding you with your decision. The price of a cryptocurrency can sometimes drop by 90% in a month, and your crypto investment can also have a 10,000% return on investment for a few years after a 90% loss.
How has Ethereum performed in the past?
Below is what you would make over time if you invested $100 in Ethereum in 2015 when ETH was trading at $1.
There are many available ways to have made a reasonable profit during this time. Below I have broken down the ways you can approach an entry and exit strategy.
What the past teaches us about Ethereum’s price projection
There are three key strategies to make a profit when buying Ethereum.
You can choose to hold Ethereum for a long time until you are happy with the profit. This strategy is called ‘HODL,’ which is short for ‘holding on for dear life.
The second strategy is to buy at all-time lows and sell at all-time highs.
The third strategy is DCA, short for dollar-cost average. It is investing a small amount on a regular schedule to reduce the impact of market volatility.
If you look at the price over time, you will notice you would still profit as long as you don’t cash out. Buying $100 of ETH since the initial price of $1 per ETH would still give you a profit. If you sold at an all-time high in 2015 and bought again in that same year at all-time lows, you would also be in profit today. You need to remember that the ETH coin price forecast should be perceived as uncertain, and there is always a risk of losing everything you have invested.
Ethereum Forecast
Industry experts seem to unanimously agree that Ethereum is headed for the moon in the coming years. Cathie Wood, Founder and CEO of Ark Invest, says she expects Ethereum’s market cap to hit $20 trillion by 2030. This would put ETH at a price of about $166,000 per coin. This is among the boldest forecasts among all experts in the industry. Experts at Finder.com, including their Founder, Fred Schebesta, think Ethereum (ETH) will be trading at around $26,500 by December 2030.
Long-term Perspective
Ethereum has seen a blast in its price over the past few years. With the current pace at which the blockchain industry is evolving, Ethereum, which is at the center of the development, is bound to increase its price. Currently, ETH seats at a price of $3,405. However, experts predict a price of $50,788 by the year 2030. The metaverse and NFT niches explosion has drawn in fresh money from the traditional markets. As non-crypto investors begin to gain interest in the metaverse, more and more money will flow into Ethereum and Ethereum-powered products. The majority of the metaverses and NFT projects are built on Ethereum. Hence, a price explosion is bound to follow soon. Experts at Coin Price Forecasts predict that by 2030 Ethereum will be trading at around $18,000 per token, signifying a 440% increase from today’s price.
What will drive the price of Ethereum?
Ethereum is the backbone of decentralized finance (DeFi), metaverse, NFT, and many more niches in the blockchain industry. One of the major factors that are going to play important roles in the price of Ethereum is the metaverse and NFTs. The Metaverse revolution is currently attracting the attention of big names from the traditional world, including Facebook, Microsoft, and even major game development engines such as Ubisoft and Sony. These projects’ investment into the metaverse means that Ethereum will get much more attention and much more usage. This will drive its value up. As these new investors begin to stream into the Ethereum ecosystem, they will need to pay gas fees to develop their projects. The more they use the ETH network, the more gas they burn, and hence, the higher the price of Ethereum. As Ethereum draws nearer to the beacon chain merge, Ethereum will transform into a full proof of stake network. Triple Halving Event Ethereum will undergo a major triple halving event that will transform it into a deflationary token. A triple halving event is a phrase used to refer to the combination of two major events on the Ethereum network that will substantially reduce the emission of ETH coins into circulation. The Ethereum Improvement Proposal (EIP-1559) and the Beacon chain merge are these events. The EIP-1559 proposes a change to the Ethereum primary code that will increase the mining speed of ETH coins. This upgrade means that gas fee estimation will be more accessible by introducing a base fee system and a fee-burning mechanism, which makes Ethereum a deflationary asset. According to market experts, ETH sell pressure will reduce by about 30% as a result of EIP-1559, resulting in much less ETH in the market for buyers. The beacon chain merger is a whole new protocol that completely changes the way the Ethereum network works. It transforms Ethereum from a Proof-of-Work (mining) system to a Proof-of-Stake (staking) system. It also means that instead of rewarding blocks to miners with the greatest computing power, it will reward blocks to stakers according to their share in the Ethereum staking pools. The Beacon chain, also called ETH 2.0, will result in much less ETH in the market as every ETH holder will rush to stake their Ethereum in order to reap the rewards. There are over 10 million ETH staked (about 12% of the entire ETH circulating supply) in just 1 year and 3 months since the Beacon chain Phase 0 went live. This is only bound to increase in the future.
This triple having event will drive the price of Ethereum high since the demand for the token will increase while the supply begins to rapidly decrease. Rate of adoption Ethereum’s rate of adoption has clearly increased immensely over the years. According to CoinTelegraph, during the first five years of both Ethereum and bitcoin, Ethereum has grown larger than Bitcoin in terms of usage by four. According to Etherscan, the supply of Ethereum has grown steadily over the years since 2016, signifying that the demand for the ETH token is ever on the rise.
Apart from that, Ethereum’s daily transactions have risen from around 9000 transactions per day to a peak at over 1 million transactions per day.
Additionally, the number of unique addresses on the Ethereum network has also grown rapidly from just above 30,000 in 2016 to well above 190 million in 2022.
Liquidity
Ethereum is one of the most liquid assets on the blockchain. According to Etherscan, the average block time on the Ethereum network as of March 28th, 2022, is 13.11 seconds. This means that it takes 13.11 seconds to add new Ethereum coins to the market.
Currently, Ethereum has a circulating supply of 120,160,418 coins. However, the maximum number of coins coded to exist in a cryptocurrency’s lifetime is not available. While Ethereum has an unlimited supply, it also has a limited maximum annual supply of 18 million ETH. This means that 18 million ETH are added into circulation every year. The network difficulty and hash rate dictate this number. At the moment, Ethereum network difficulty sits at 13,061 TeraHashes (TH).
This means that it is infinitely more difficult to mine Ethereum coins today than five years ago. Ethereum is also headed for the Beacon Chain merger, transforming the network into a full-proof stake network. This will cause Ethereum to become a deflationary crypto asset, making its price go up. Currently, Ethereum liquidity sits at over $126.76 billion, according to data by DeFi Lama.
What are Big names saying about Ethereum?
Crypto is being talked about by many like never before. It’s being labeled as an asset of the future, and it does not fall short when it comes to conversations for the rich. Elon Musk, a tech-savvy billionaire, has shown support and enthusiasm for Ethereum in his Twitter post various times. In a Twitter post on 24 October 2021, he replied to a Twitter user by saying, “I acquired some ASCII hash strings called Bitcoin, Ethereum, and Doge. That’s it.” Mark Cuban revealed in an interview with crypto banter on 15 February 2022 that he shows a lot of enthusiasm for the future of Ethereum. Mark Cuban is a self-made billionaire, and one of his notable successes is in companies like Micro solution. Every investment should be studied for its risks, and Ethereum has no exception. There are also remarks from prominent names who have warned about its future price drop. Do your research and invest with caution. Cryptocurrency is volatile, and even those big names I have mentioned are not entirely sure of Ethereum’s future price. Crypto experts should not make you believe that they have the best investment advice. Internal and external factors can move the direction of Ethereum to another outcome.
Tips for ETH Investors
Cryptocurrency is still in its new stages of technological development. Understanding this technology can be a daunting task, and it can be hard to learn about it; lucky for you, we have narrowed down what you need to know. Here are ways to protect your investment and the necessary precautions to take:
It’s very important not to click on suspicious links or send out information about your wallet. Hackers can gain access to an unsuspecting user’s wallet and drain them of their funds. Always secure your wallet with an added layer of protection like two-factor authentication. Cryptocurrency traders also need to protect their social media accounts. Crypto hackers can impersonate you and steal from close friends and family. Take care of giveaway scams, NFT scams, altcoin pumps, and dumps. Keep learning the technology because you are the first defense against fraudsters. Cold storage wallets are the most secure to keep your Ether; here are some of the top 5 wallets to use.
Frequently Asked Questions
❓ What is Ethereum in a nutshell?
Ethereum is a cryptocurrency that was started on 30th July 2015. Ethereum founder Vitalik Buterin created it with its main focus on programmability. It serves to build and expound by creating other technological use cases.
🚀 How can I buy Ethereum?
You can buy Ethereum at any of the recommended crypto exchanges. You can also buy it in a hot wallet like a Trust wallet or store it in a cold wallet. ETH is the coin you will own when you have Ethereum, and this is the token you will use for transactions.
🏅 What is a smart contract?
A smart contract is an agreement coded in code algorithms and self-executed, so it does not need human contact and documentation. Smart contracts are used in the Ethereum network through ETH, and Ethereum-based network members have access to Ethereum Virtual Machine. Here all Ethereum transactions are executed. It also allows developers to build smart contracts and embed them in the network. Companies like AXA’S Flight Insurance are using it to reduce the process of insurance deals.
⚡ What is Ethereum’s competition?
New coins are being built every day, but Bitcoin’s most noteworthy. Solana (SOL) is also a cryptocurrency that is growing rapidly. Its supports smart contracts, NFTs, and many more projects. At the current price of around $100 in 2022, it has a long way to go to reach Ethereum, but it cannot be dismissed as a competitor. Cardano (ADA) could also be in that category. It was founded in 2015 like Ethereum but released for public trading in 2017.
❗ Should you hold Ethereum for the long term?
It all depends on your research and findings in the end. Take the time to learn more about Ethereum and do your research. Ethereum’s future is uncertain, and investment advice is not always correct. A good investment is an investment you understand.
👉 What is an NFT?
NFT stands for Non-Fungible Token. They are unique because no token is the same. The token can be pegged on an asset making the owner the only person to own it. A Digital art piece in the crypto space can be minted and sold as an NFT.
❓ What are DCA and HODL?
DCA – DCA is Short for “dollar-cost average”. It is investing a small amount on a token on a regular schedule to reduce the impact of market volatility. Dollar-cost-average can reduce the impact of your Ethereum investment in a volatile market. People use this trading method over a long period, and the method does not work if you use it for a few months or weeks, then stop. HODL – ‘HODL’ stands for “hold on for dear life”. People started using the word in 2013 after a post from a user in the Bitcointalk forum. It may also be a misspelling of the word hold. Today it is used by crypto investors. Ethereum investors use it to mean hold Eth for a long time through the market volatility.
