Is ETH a good crypto to buy for 2021?
Erick After a stunning performance in 2020, all eyes are now on the Ethereum price prediction for 2021. It’s shaping up to be a significant year for this cryptocurrency – especially considering that Phase 0 of a long-awaited upgrade to a Proof-of-Stake consensus mechanism has now begun in earnest.
As the chart above shows, ETH has enjoyed a surge this year that even the most optimistic Ethereum predictions failed to anticipate in December 2019. Overall, the world’s second-largest cryptocurrency has gained more than 330 percent since starting 2020 at $130. At its highest point, ETH even managed to reach $635 – smashing that all-important psychological milestone of $600 in a meaningful way.
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Will Ethereum rise further? Well, a lot of this could depend on how smooth the painstaking transition from Proof-of-Work shapes up to be. It’s a process that could take several years to finish, and it’s already been beset by technical difficulties and delays. Nonetheless, it’s work that urgently needs to be completed – especially considering that the blockchain is creaking under the strain of demand for DeFi protocols.
Enthusiasts making ETH price predictions point out that the cryptocurrency’s growth has far outpaced that of Bitcoin this year… and that it still has room to run.
Bitcoin reached recent heights of about $19,845 as institutional demand boomed, meaning it was about one percent away from its all-time high of $20,089. But Ether’s high water mark of $635 is about 56 percent off the highs of $1,432 that was seen in early 2018 – indicating that there could be plenty of opportunity for growth.
Ethereum price prediction 2021: what should we expect?
Not everyone is convinced that there’s going to be fireworks in their Ethereum price predictions. Bloomberg Intelligence analyst Mike McGlone said that ETH and XRP’s outperformance of BTC this year “is indicative of the enduring nature of fintech in a world increasingly dominated by zero or negative rates and quantitative easing.” But looking ahead to next year, he believes that ETH will only remain in a range of $500 to $700.
Messari’s Ryan Selkis also had an interesting take when exploring why Ethereum is rising. In a recent report looking ahead to what 2021 has in store for the crypto space, he wrote:
“Bitcoin may be primed for a big year due to its macro positioning, but it’s Ethereum that has taken flight as crypto’s most important platform...one that could power an entirely new financial system, and a more open, resilient internet.”
Selkis pointed to how Ethereum may have even overtaken Bitcoin in terms of the economic value that’s transferred over its network, with the blockchain posed to process a whopping $1trn in transactions by the time 2020 has drawn to a close.
Despite that, the analyst was keen to stress that Ethereum isn’t money, and the extraordinary levels of demand won’t necessarily translate into new records:
“Bitcoin will remain the most valuable digital currency, crypto or dollarized, indefinitely, but the same isn’t necessarily true for Ethereum and its ilk.”
The matter of will Ethereum rise hinges heavily on whether it can remain consistently above $600. Pushing ahead towards $700 could open the door to further upside, as there appears to be little resistance then until towards the $900 and $1,000 mark.