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It has long played second fiddle to its popular older brother Bitcoin but there are plenty of reasons to be excited about the future for Ethereum. With experts across the fintech landscape expecting big things from the cryptocurrency in the coming months and years, could ETH finally turn the tables on BTC?
According to a Finder report consisting of 50 fintech specialists, ETH is expected to reach a value of $5,114 by the end of 2021. The findings from the Ethereum price predictions report forecast the average price expectancy of ETH over the rest of 2021, 2025 and 2030.
Although a value of $5,114 seems to be a significant leap from its current price of around $4,000, it pales in significance compared to 2025, in which experts anticipate a price of around $15,364 per coin. The cost of Ethereum by 2030 is even more mind-boggling, with $50,788 expected to be reached by the end of the decade.
Finder’s data also suggests that 63% of panelists believe now is a good time to buy Ether, while 9% feel as though it’s worth selling. Aside from the topic of buying and selling, 28% of those surveyed believe it’s time to ‘hodl.’
(Source: CoinGecko)
As we can see from Ethereum’s all-time price chart, the cryptocurrency has enjoyed significant growth across the entirety of 2021. With the upcoming rollout of ETH 2.0 and a more adaptive blockchain framework, could we see the asset finally mount a genuine challenge to Bitcoin’s market dominance?
Looking to ETH 2.0
Significantly, the past six months have seen Ethereum performing better against Bitcoin than at any other stage since mid-2018.
(Source: TradingView)
One of the key reasons behind Ethereum’s growth in relation to BTC can be attributed to the upcoming arrival of ETH 2.0. Also known as ‘Serenity’ or ETH2, this upgrade brings enhancements to the speed, efficiency and scalability of the Ethereum network helping it to process more transactions and ease bottlenecks.
Ethereum 2.0’s first phase launched in December 2020 with its first upgrade, called the Beacon Chain. This upgrade introduces native staking to Ethereum’s blockchain, which is a key facet of the network’s transition to a proof-of-stake consensus mechanism.
As indicated by its name, the Beacon Chain will act as a separate blockchain from the Ethereum mainnet.
The second phase of ETH 2.0’s rollout, known as ‘the Merge,’ is set to occur in the first half of 2022, and will work to merge the Beacon Chain with the mainnet a development that’s set to excite Ethereum investors.
With Ethereum’s network upgrade underway, the implications of the practicality of the cryptocurrency’s blockchain mean that ether may gain further ground on the more old-fashioned framework of Bitcoin.
(Source: DeFi Pulse)
As the chart above shows, Ethereum has played a key role in powering the burgeoning decentralized finance ecosystem. With around 7.5 million ETH currently locked into DeFi, Ethereum 2.0 is likely to bring more scaling solutions and functionality into the space vastly improving the quality of services produced on the network and growing the appeal of using Ethereum’s blockchain further.
Could a 2022 ‘flippening’ become possible?
With the emergence of ETH 2.0 in mind, could we potentially see the long-awaited ‘flippening’ between Ethereum and Bitcoin occur in 2022? The flippening refers to the moment when Ethereum’s market capitalization surpasses that of Bitcoin.
(Source: CoinMarketCap)
As we can see from the chart above, in 2021, Bitcoin’s market dominance fell to its lowest levels since mid-2018’s bear market, while Ethereum hit 19% of the total cryptocurrency market cap for the first time since February 2018. Could both coins’ respective momentum see a flippening occur soon? Some fund managers believe that ETH now represents a smarter investment.
According to an October survey of fund managers conducted by CoinShares, 42% of respondents view Ethereum as the asset with the most compelling growth outlook while just 18% chose Bitcoin as their first choice. In addition to this, ETH is currently also held by more fund managers than BTC.
The appeal of Ethereum is growing at a pivotal time in the retail investing landscape, as more investors than ever are opting to buy into cryptocurrencies.
(Source: Statista)
As the data above shows, the volume of blockchain wallet holders globally has grown exponentially in recent months and Maxim Manturov, head of investment research at Freedom Finance Europe, believes that more investment is around the corner.
Manturov said,
“It is important to note that real interest rates in the US have been negative for an extended period. Real interest rates will likely remain negative even after the (likely) Fed rate hike in 2022. This is important because negative real rates contribute to higher trading and speculative activity in asset markets. To maintain their purchasing power despite the negative rates, the Americans will be looking to generate income from stocks, cryptocurrencies, precious metals and other investments and trading instruments.”
With more investment likely to arrive as Ethereum continues to improve its network, could we be set to see more ETH purchases around the corner? And could growing interest in Ethereum pave the way for the cryptocurrency to become more dominant than Bitcoin?
One thing that’s certain is that the cryptocurrency landscape will remain thoroughly volatile long into the future, and this price volatility means that a wide range of unforeseen circumstances can positively or negatively impact the price of a coin.
However, the ongoing ETH 2.0 upgrade means that Ethereum’s continuing to improve its framework for its users, and the possibilities attached to its blockchain are growing. With this in mind, we may soon see a fresh challenge to Bitcoin’s dominance from its long-term second fiddle.
Dmytro Spilka is a tech and finance writer based in London. His work has been published in Nasdaq, Kiplinger, Financial Express and The Diplomat.
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