Skip to content
Home » Ethereum – How the cryptocurrency will perform this year

Ethereum – How the cryptocurrency will perform this year

Ethereum is the most widely known altcoin. It’s also a popular cryptocurrency that many enthusiasts and investors use. Experts believe it could rise in value as high as 400% in 2022.
Ether (ETH), Ethereum’s native coin, has experienced a huge increase in its value since its creation. Vitalik Buterin, a computer programmer, launched Ether in 2015. It has seen a dramatic increase in its value, from $0.311 when it was first introduced in 2015, to approximately $4,800 late last year. However, there have been many fluctuations.

Although the Ethereum price graph fell to $2,800 Friday (as of Friday), it still has a lifetime ROI of over 700,000%. Ethereum is unique because it allows developers to build new apps and tools.

The blockchain-based software network is used for many purposes across the tech world, particularly in gaming, music and decentralized finance (DeFi). It has been one of the most well-known and widely-used cryptos over the past year.

Ether’s ROI at an annualized rate is close to 300%. Since the summer 2014, early investors have quadrupled the amount of their investments each year. However, crypto prices are known for being volatile. Financial experts recommend that you only lose what you can afford and not invest in foundational goals such high-interest debt repayments or emergency savings.

So what is the expected price of Ether? Here’s a look into the factors that contributed to Ethereum’s unpredictable, but still rising, price projections. Experts also predict what will happen this year.
Predictions of the Ethereum Price

Three experts were asked to forecast the future price for Ethereum. They each stated that it was nearly impossible to predict how high Ethereum will go this year. Others have predicted that ETH’s value will rise more than Bitcoin in the months ahead. This is due to Ethereum transitioning to a less energy-intensive version, which insiders call “Ethereum 2.0.” Experts wait to see how investors and companies that are building their tech on Ethereum to respond to the changes.

These are the factors that will influence Ethereum’s 2018 price. Here are some predictions:
Pro Tip

Financial planners recommend that crypto investments should not exceed 1% to5% of your total portfolio. Despite its popularity, the crypto market can be volatile and prices may fluctuate quickly overnight.

Despite the difficulties of predicting the prices of volatile cryptocurrency, most experts we spoke to agree that ETH could again surpass $4,000 by 2022. Mike McGlone, a Bloomberg intelligence analyst, predicts Ethereum could surpass $4,000 in 2022.

But how far can it go? There are many factors that can contribute to the long-term value of this asset, but we will not go into detail.

Coinpedia, a crypto news site, predicted that ETH will end 2022 at between $6,500-7,500 if the bullish trend that began in mid 2021 continues. However, the bearish downturn of 2022 in crypto markets made it clear that Ethereum is not likely to see a rise in price based on sentiment alone. The Ethereum team is currently transitioning to the second-generation update and has significant competition in the blockchain market.

Henri Arslanian was the global crypto leader for PwC, and said, “Ethereum is the only show in the town,” in a CoinDesk’s First Mover episode on January 12. Investors must see better demand and functionality for Ether in order to keep its price rising.

NextAdvisor: “I believe Ethereum will go to $8,000,” Ian Balina – investor and founder at Token Metrics, crypto research and media firm, stated. “Ethereum is the clear leader, but other Blockchains are onboarding users at a faster rate due to Ethereum’s high transaction speed and high gas prices.”

Coinpedia expects that Ethereum 2.0 will result in a much higher price at $12,962.33 by 2022. These upgrades could make Ethereum cheaper for users to develop and mint new products. However, Ethereum’s current service fees are extremely high.

What influences the price of Ethereum?

Ethereum’s reputation for being the first blockchain platform to use smart contracts is a testament to its ability to execute financial transactions via algorithms.

There are many new Ethereum alternatives available that have similar capabilities. This is changing the demand and influencing the price of ETH. Here are a few factors that affect Ethereum’s price.
High Traffic and Usage

Smart contracts allowed artists and creators to make and sell digital artwork, now called non-fungible coins (NFTs). It was both a blessing for Ethereum and a curse. Because of the popularity of the blockchain, there was a “bottleneck” in the blockchain. You can think of Black Friday’s mall parking lot digitally.

It’s becoming increasingly costly to transact on Ethereum because of the number of users. While the Ethereum team has responded by developing new infrastructure upgrades, it has taken several years to build the technology.

In the meantime, several new companies have created add on solutions (known as Layer 2s) that work on the Ethereum blockchain. Also, completely new blockchain networks (known to be “Layer 1s”) were released. They are being marketed as potential Ethereum alternatives. This drives traffic away the Ethereum blockchain, and adds new competition. This can either increase or decrease the product’s popularity on the market.

Investors can benefit from more users using Ethereum. This means that there is more support for your investment. Competitors pulling away users could also impact Ethereum’s value.
First Movers Advantage

Despite the new competition, experts often suggest Ethereum’s “first mover advantage” has positioned it for long-term success, even though newer and more environmentally-friendly technologies have been developed. But, cryptocurrencies can only be valued due to community buy in, so it’s more important for users to commit than being the first.

Fortunately, Ethereum has both. John Zannos is a partner at Inflection VC. This early-stage venture firm invests in the open economy as well as blockchain companies. “But, what is most important to me, apart from the size and health of the community, and how many people are joining that community, since that’s what’s driving innovation.

Cardano and Solana, which are both new blockchains, offer similar functionality as Ethereum but have their own native cryptos. Experts believe Ethereum is well-positioned to grow with its customers and meet future demand.

Raza Khan (an investor in fintech and the founder of Be., a blockchain platform, believes that Ethereum could expand its capacity quickly if it so chose.” At the moment, the Ethereum community seems content to wait and see what happens.
Competition from the ‘EthereumKillers’

Web3 could become a household name if “cryptocurrency” and “NFT” were household terms in 2021. Web3 is an open access version of the internet that uses blockchain technology. This allows for financial transactions to be transparent, individual ownership of their data and the majority of the infrastructure to be owned by users.

Companies such as Ethereum, Cardano, Tezos, and Solana are developing the infrastructure necessary to support the future vision of Web3. Investors view these developments as similar in nature to the dot com boom of when Apple, Google, and Facebook first became public knowledge.

Balina states that the fight for Web 3 will be the most important battle of all, and that the internet’s next evolution will take place in 2022.
The Future of Ethereum

Despite Ethereum’s competition and other factors contributing towards its volatility, there’s a general feeling of optimism that the original smart contracts blockchain will get through this era.

Arslanian said that Ethereum holds more than 90% of the NFT marketplace. “This will be an important year for Ethereum. A make-or-break years.”

Zannos, NextAdvisor’s CEO, says there are good reasons to expect a rapid rebound from the current slump Ethereum has been experiencing. Zannos asserts that Ethereum is blessed with the momentum of community, which allows for innovation and new opportunities to be created by a group of highly intelligent people. “At the core of my optimism is the versatility of Ethereum.