What will 1 Ethereum be worth in 2050?

Ethereum ($ETH) is the second most valuable token when measured by market cap, and the Ethereum platform offers its users a wide array of tools. Unlike Bitcoin, which was aimed solely at making financial transactions, the Ethereum blockchain was designed to do a lot more.

The blockchain that powers Ethereum is far more complex than Bitcoin and allows third-party developers to create their own tokens and sub-platforms on the blockchain. This has led to a steep rise in the popularity of Ethereum, although it has also created issues for some devs that decided to invest in creating new platforms on blockchain which means making an accurate Ethereum price prediction requires a holistic approach.

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ETH in a nutshell

ETH is the native token of the Ethereum blockchain. While Bitcoin was designed to be money, Ethereum was aimed at a much wider range of potential uses. ETH tokens make the whole blockchain work and are needed to do anything on the Ethereum blockchain.

For the moment, ETH uses a Proof-of-Work (PoW) system that is similar to Bitcoin to approve transactions and maintain the blockchain. This may be changing over the next few years with the advent of ETH 2.0, although the roadmap to implementing the new Proof-of-Stake (PoS) system isn't well defined.

While the ETH token wasn't necessarily designed to be used solely as a currency, it has become a popular means of both savings and payment. Ethereum also has a robust ecosystem that is one of the most important tools that Decentralized Finance (DeFi) devs have currently.

How has the price of ETH performed in the past?

ETH's price records go back to late 2015 when it was trading on the open market for less than $1.00. It was able to stage a modest rally into the $10.00 area by January of 2017, which is when the real fun began. ETH prices went on a breakneck rally to over $1,400 per token in January of 2018, when it entered a bear market that would take the price as low as $87 by the end of 2018.

After the fall to double-digit prices, ETH traded sideways for a year and a half. The token seemed to be capped at $250 during this time, but it also seemed to be finding buyers at the $100 level.

In July of 2020, the $250 level was overcome on heavy volume. ETH traded as high as $475 in September of this year, before falling back to test the breakout at the $320 level. From there, ETH has rallied to over $600 in late 2020, and the chart for the token looks bullish, as it has been able to break out of a multi-year trading range on massive volume.

What factors affect the price of ETH

Ethereum is a complex platform that is influenced by many different factors. Because Ethereum's blockchain is built to encourage third-party development, new platforms that run on the network can have a big influence on the price of ETH tokens, and transaction costs on the platform.

One of the biggest things that may have driven ETH out of its trading range in the middle of 2020 is the DeFi boom. While ETH isn't necessarily used by all these new DeFi platforms as a means of transaction, many new DeFi platforms are built on the Ethereum blockchain, which means that some amount of ETH is needed for the DeFi tokens or platforms to operate.

The use of Ethereum as a base for DeFi applications resulted in net demand for the token, which was clearly good for the price.

Curiously, as the DeFi bubble went bust in the fall of 2020, ETH prices remained elevated, and trading volumes were higher than at the beginning of the year. All of this points to other sources of demand for the token, as well as a limited connection between DeFi token prices, and ETH prices.

As 2020 unfolded, demand for alternative assets rose. As the second most valuable token behind Bitcoin, ETH has become an investment asset for many institutional investors who are entering the crypto markets.