Ethereum (ETH) Price Analysis: ETH is the second largest cryptocurrency by market capitalization and is indeed one of the most ambitious crypto projects. It’s not a coincidence that there are huge expectations for its price both in the short- and in the long-term.
Launched in 2015, Ethereum was created by Vitalik Buterin, a young Russian-Canadian programmer. ETH intends to be more than just a coin with cryptography, but the foundation of a new era of the Internet.
Just like Bitcoin, ETH is entirely digital and can be used as a store of value, as collateral or as a medium of exchange. By using ETH, you gain the ability to send money to anyone anywhere in the world instantly, without going through a third party. ETH transactions are also stored on a public ledger and are powered by blockchain technology.
Buterin’s coin can offer more than other blockchains. Ethereum is programmable, allowing users to create decentralized applications (dApps). Since its creation, hundreds of dApps were built using Ethereum technology, including crypto games, decentralized finance (DeFi) applications, and even other cryptocurrencies.
Ethereum also enables the creation of smart contracts, which is a kind of a digital agreement between two or more parties carried out by an algorithm. Writing Ethereum smart contracts is super easy (even for non-coders), which makes it perfect for games, finance, jobs, and other kinds of dApps.
With all these features, Ethereum became a consolidated project with a loyal community of supporters. Not surprisingly, most Ethereum (ETH) price analyses are optimistic. Let the Cripto InterCambio blog explain you why.
Ethereum (ETH) Price Analysis: Historical
In order to make an accurate analysis of Ethereum prices both in the short- and the long-term, it is important to do a historical data analysis. Let’s check out its price chart:
In its first years of existence, Ethereum grew slowly, but consistently. Until 2016, it was under $1 USD. One year later, at the beginning of 2017, it cost $11.
But then, a miracle happened. After the second halving, Bitcoin price skyrocketed, pumping together the entire crypto market. Ethereum was no exception, and its price pumped from $11 to $337 in June 2017, and then to $1,367 in January 2018, when the Ether reached its All-Time High (ATH).
After the ATH, the price dumped. Ethereum reached $84 in December 2018, its lowest level since 2017. Since then, Ethereum has been recovering, but without overcoming the $300 resistance.
This means that Ethereum was adopted by a lot of users. People aren’t selling it, despite the huge fluctuations in price. On the other hand, in the last years, its price remained far away from the ATH.
Will that change in 2020? And in the long-term?
Ethereum (ETH) Price Analysis: Short-term and long-term
2020 has been an atypical year for the cryptoworld.
The Covid-19 pandemic has affected markets all around the world, and the crypto market is no exception. A big dump has led to the total market capitalization going from approximately $30 billion USD in February to a minimum of $11 billion in March. Since then, the total market capitalization has been recovering. At the time this text was written, the crypto market cap was about $27 billion.
Ethereum hasn’t been immune to the big fluctuations on the market. On January 1, ETH price was $131. In the beginning of the year, it kept on growing, reaching a peak of $281 in February. Then, in March, the price dumped to $106. Nonetheless, Ethereum has been recovering: at the time this text was written, ETH price was $247.
In this sense, the fear of the pandemic seems to have passed on the crypto market in general and among Ethereum investors in particular. ETH has shown signs of strength, quickly recovering from its February prices.
Moreover, 2020 is the year of the third Bitcoin halving. The crypto market as a whole is heated, and many investors are betting that the supply shock will take the BTC price to the moon again.
So far, the prospects are encouraging. Just like in 2017, Ethereum could benefit from a possible Bitcoin price pump.
In the long-term, an increase in Ethereum prices mainly depends on the success of its next update: Ethereum 2.0.
During 2020 and 2021, Ethereum will be updated to a proof-of-stake (PoS) consensus mechanism. The objective of ETH 2.0 is to allow greater scalability on the Ethereum Network, with cheaper, faster, and even more reliable transactions.
Moreover, the update will also create a staking system on the Ethereum network, that could bring 4% – 10% annual returns to its investors. This will be a huge incentive for people to buy and hodl Ethers.
The update could consolidate Ethereum as a reliable network for payments. Additionally, it could make the dApps ecosystem even stronger.
Prices may go up or down due to speculation. But in the long-term, a sustainable price appreciation depends on the adoption of the coin. The fact that Ethereum is a programmable blockchain facilitates its adoption and diffusion in a wide range of digital uses.
Conclusion: The future of Ethereum
There is great optimism regarding ETH prices both in the short- and in the long-term. After only five years of existence, Ethereum has consolidated as one of the most reliable crypto projects in the market. Even so, it continues to innovate.
Nowadays, scalability is the main issue of the Ethereum network. If the update to a Proof of Stake (PoS) system succeeds, Ethereum will have even greater potential. 2020 will be decisive when it comes to measuring the trust of investors in the project.
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