Ethereum is a functional, widespread blockchain platform holding a high position among the most popular blockchains. Ethereum appeared as an alternative to the Bitcoin blockchain, providing a different approach to cryptocurrency operations, another scripting language, and the ability to create smart contracts and decentralized applications.
As a matter of fact, there exist two versions of the platform:
- Ethereum (the initial project)
- Ethereum Classic (Ethereum blockchain fork)
As a result of the splitting, the rate of the Ether skyrocketed by more than 13,000% in 2017. This made Ether the most popular cryptocurrency after Bitcoin. Consequently, investors, contributors, and cryptocurrency enthusiasts became interested in investment options and ways to profit from the currency growth.
Though Ethereum is often compared to the Bitcoin blockchain, its main characteristic is that it allows the user to deal with cryptocurrency transactions. It also provides a Turing-complete platform conducive to smart-contract creation and DApp management.
Because everything is easier to understand with comparisons, let’s take a closer look at the following table of platform features:
What Influences Cryptocurrency Price?
Cryptocurrency value and its price depend upon a number of factors such as market conditions, inflation rates, and currency supply and demand. Moreover, currency fluctuation also depends upon price. This happens when people purchase coins at a low price and wait until they are in greater demand to sell them at a higher rate.
Let’s take a closer look at the factors defining cryptocurrency market conditions:
Demand/Supply.
The higher the demand, the greater the currency value. However, balance here is crucial. If supply appears too high, the price will drop significantly.
Utility.
Any coin or token has to hold a certain utility. Functionality and various means of currency application and use result in higher value and price.
The difficulty of mining.
Another factor that influences currency value is the difficulty of the mining process. It comes as no surprise that coins that are hard to mine and require the solving of difficult puzzles are valued much more highly.
Scalability.
Scalability is defined by the number of transactions processed in one second. This is an important factor in any payment system, as high-speed transaction processing is priceless.
The Ethereum platform might not be as scalable as desired. However, Vitalik Buterin has found other scalability solutions by developing Plasma and Plasma Cash solutions. These platforms function as side-chains, storing the majority of user data in an off-chain manner. This provides a much higher scalability capacity that is comparable to Bitcoin’s Lightning network. Another solution currently investigated by the Ethereum team is the implementation of zk-SNARKs technology. This will increase the platform’s security as well as influence the speed of transactions.
Former Ethereum Price Tendencies
As a relatively new blockchain, Ethereum has already managed to deal with major hacker attacks. However, this only strengthened the platform, as new solutions provided higher security and eliminated the blockchain’s weaknesses.
According to Ether price analysis and estimation, it should be stated that the currency reached its peak of popularity in the period from March to January 2017. At the beginning of 2017, its value rose by 500% and has been fluctuating, reaching approximately $1.4 million in early 2018.
2018 Price Trends
2018 differs from the previous year. The price change relates to all cryptocurrencies, however, not just Ether. Though the price went up significantly at the beginning of the year, it resulted in two major drops. Despite such fluctuations, Ether is still considered a relatively stable currency.
The chart below illustrates tendencies in Ether price valuation during 2018:
We can see that the Ether’s value has been constantly dropping during the last few months. The reason for this is currency volatility. Starting at $1,400, it dropped to $369 in April of this year.
Considering the situation, we can’t say that Ether is the only cryptocurrency that has undergone such changes. This comes as no surprise. After the cryptocurrency boom in 2017, there have been numerous changes in ICO regulations, the emergence of new cryptocurrencies, and therefore constant changes in supply and demand within the crypto market.
All of this has impacted cryptocurrency volatility and price formation.
Ethereum Price Prediction
Cryptocurrency speculators and contributors normally predict cryptocurrency value. Moreover, speculators are increasingly interested in cryptocurrency volatility, as this allows them to manipulate the situation in order to profit. Investors, on the other hand, tend to analyze the future perspective of Ethereum price predictions from an independent point of view.
According to Ethereum predictions in 2018, the price of the Ether could go up by $500 U.S. at the beginning of 2019. However, this is only a 19% probability.
It could rise by $2,000, as well, similar to the situation when the price went from $10 to $770 in the same period last year. For this though, the market cap should equal $200 million, whereas right now, it is $25.8 million.
Ethereum Predictions 2020
Experts believe that by the end of 2020, the Ether will have risen by 500% in value. Although the valuation tendency has been decreasing lately, future predictions are promising.
Longforecast states that there is the possibility for Ethereum to hit $724 U.S. in 2020. In addition, its value could fluctuate between $470 and $670.
Coinkir predicts even better results. It foresees that 2020 will start with an Ether price of approximately $720, and will constantly grow, hitting approximately $1,500 by the end of 2020.
Smartereum predictions are more radical, stating that the price of the Ether will hit $2,500 by December 2018, and go up to $31,000 in 2020.
Such outstanding results are quite possible, especially taking into consideration such factors as:
- the high number of launched decentralized applications
- the high number of companies engaged in DApp applications
- the increase the necessity and functionality of of smart contracts
This contributes to coin utility, which represents a determining factor in price formation. The greater the functionality of the Ether, the higher the its value. In addition, both demand and supply are constantly increasing, thereby attracting more contributors.
Long-term predictions promise optimistic results for 2015-2030. Let’s wait and see what the future holds.
Ethereum Classic Prediction
Ethereum Classic (ETC) appeared as a hard fork, and has proceeded as a separate cryptocurrency over the years. Currently, its price is $10, with predictions to double in 2019.
WalletInvestor provides the following chart, and foresees a profit of 82% a year:
Hence, investing in ETC seems to be profitable, as well, despite any fluctuations. On the other hand, its value doesn’t seem to hit as high a peak as Ether does.
Conclusion
According to various estimates and predictions, it is obvious that it is worth investing both in Ethereum and Ethereum Classic. Thus, consider holding a certain reserve of your cryptocurrency if you possess some at the moment, as the long-term predictions are very positive.
On the other hand, predictions are not facts. Therefore, make sure to avoid potential risks to stay safe. Here are some to keep in mind:
