Is it possible that Ethereum is the future of cryptocurrencies?

Ethereum is the second most famous cryptocurrency after Bitcoin. In the months ahead of the highly anticipated Ethereum 2.0 standard, many people wonder what is the future of Ethereum. And how exactly does the value of its native coin Ether (ETH) will perform.

So far, there are valid reasons to believe that the prospect of Ethereum in the upcoming years will be mostly positive. But it depends on the dominance of ETH in the market capitalization, popularity, and network value settlement, having even to transcend Bitcoin in the latter.

The ETH price is predicted to retain its upward trajectory based on past performance and the growing adoption of the Ethereum blockchain. Since the Ether is second only to Bitcoin with a $20 billion capital and $12 billion daily trading volume. Many expect an ETH breakout driven by Ethereum’s status as the first and only general-purpose blockchain.

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What Is Ethereum?

Launched in 2015, Ethereum is an open-source digital asset run on a decentralized platform. It is one of the cryptocurrencies available today that enables the revolutionary functionality of smart contracts and Decentralized Applications (ĐApps). These allow any application, process, transaction, or mechanism to run without any downtime. That includes eradication of fraud, control, or interference from a third party on the Ethereum blockchain.

The Retrospective: ETH Growth and Projections

Many components drive Ether’s price and contributed to its stable growth since the inception of the Ethereum blockchain. Ethereum was created to be far more versatile than Bitcoin’s blockchain. It allows for smart contracts, powerful tokenization, complex decentralized applications, and decentralized fundraising campaigns.

The explosion of Initial Coin Offerings (ICOs) in 2017 saw Ether used as the primary funding mechanism for the crowdfunding projects. As most projects used the Ethereum ERC-20 standard for their tokens, speculation for their tokens grew, and so did Ether’s price. While many still are uncertain about the future of Ethereum, here are the ETH’s projections over the years.

ETH All-time High

In 2018, the market saw Ether reach its all-time high of $1,412 on January 10. It wasn’t until 2020 that the cryptocurrency goes on bulls again to $545 as of Nov 22, 2020, and reaching almost its all-time high on Jan 12. at $1,281.

When looking at growth charts, the pattern of Ethereum as a cryptocurrency is more impressive even than Bitcoin’s. At the same time, the tendency tends to remain.

ETH Collapses

In 2019, after a significant Bitcoin breakdown, the price of ETH followed suit, bringing the price for the coin down to the $132 level. This marked a 30% drop in value for the cryptocurrency as the coin’s market cap value stood at the $13.98 billion levels.

Despite the sudden price drop, ETH managed to find some form of support. In fact, it shows bulls prospect after the collapse and soaring again when the altcoin season is in.

What Is Revolving Around ETH in 2020?

The year 2019 is indeed pivotal for Ethereum in terms of development achievements. As well as the growing popularity of its market-reigning decentralized applications, or ĐApps.

Although there were no significant changes in Ether’s (ETH) price, the cryptocurrency could start recovering from the deep and repeated selloffs throughout 2018.

What Is The Ether Price Like Now?

Ethereum started 2020 at $130 per coin but continued to surge as the general cryptocurrency market gained an upside momentum. Its first significant price hike came towards February after it spiked to $279 per coin. Once it broke the resistance level, ETH was able to trade above the $500 mark. That’s after Vitalik Buterin gives assurance to the cryptocurrency community through the scheduled launch of Phase 0 of Ethereum 2.0. As of Nov 2020, ETH is trading around $590. Now (Jan 12, 2021), 1 ETH is trading at $1,055.

The Impact of DeFi on ETH Price

In less than a year and a half, DeFi has grown by almost 300% in terms of dollars locked up as crypto collateral. Ethereum, which is the backbone of this new financial ecosystem, currently has 2.5 million ETH locked up, which represents 2.25% of the entire supply.

As the world experienced considerable economic turmoil in 2020 due to the global coronavirus pandemic, decentralized finance markets have largely weathered the economic storm. This could mean that this new financial landscape could significantly impact Ethereum than the ICO did in 2017.

ETH Price Analysis

As of November 2020 – Ether’s price has been trading in a positive zone above $450 against the US Dollar. Projections for ETH/USD are that the crypto’s value could accelerate higher once again. But as long as it doesn’t fall below the resistance line of $440.

Although there has been some volatility in the price movement, Ethereum has been in a generally bullish upward trend since the start of 2020. There was a brief but expected price correction to $374 on November 06. ETH has since continued its upward movement to hit $465 on the 7th of Nov before a slight pullback to $435 the next day. At the time of writing this, the ETH price stands at over $530.

Ethereum’s Future on Scalability and Profitability

Another crucial factor that drives Ethereum’s adoption and popularity is its unifying standards, which simplifies integration into the Ethereum network. That being said, the Ethereum network has been plagued with bottleneck scalability issues for the longest time due to increased usage on the network. This has resulted in severe congestions, with the average transaction fees growing significantly.