It has long been second fiddle to its more famous older brother Bitcoin – but there are plenty of reasons to be optimistic about Ethereum’s future. Could ETH finally turn the tables on BTC, with experts across the fintech landscape expecting big things from the cryptocurrency in the coming months and years?
According to a Finder report compiled by 50 fintech experts, ETH is expected to be worth $5,114 by the end of 2021. The findings of the Ethereum price predictions report forecast the average price of ETH over the remaining years of 2021, 2025, and 2030.
Although a value of $5,114 appears to be a significant increase from its current price of around $4,000, it pales in comparison to 2025, when experts predict a price of around $15,364 per coin. The price of Ethereum by 2030 is even more astounding, with $50,788 expected by the end of the decade.
According to Finder’s data, 63 percent of panelists believe now is a good time to buy Ether, while 9 percent believe it is time to sell. Aside from buying and selling, 28 percent of those polled believe it is time to ‘hodl.’
According to Ethereum’s all-time price chart, the cryptocurrency has experienced significant growth throughout 2021. Could the asset finally mount a genuine challenge to Bitcoin’s market dominance with the upcoming release of ETH 2.0 and a more adaptable blockchain framework?
Looking ahead to ETH 2.0
Significantly, Ethereum has performed better against Bitcoin in the last six months than at any other point since mid-2018.
One of the primary reasons for Ethereum’s rise in relation to BTC is the impending release of ETH 2.0. This upgrade, also known as ‘Serenity’ or ETH2, improves the speed, efficiency, and scalability of the Ethereum network, allowing it to process more transactions and alleviate bottlenecks.
The first phase of Ethereum 2.0, known as the Beacon Chain, debuted in December 2020. This upgrade adds native staking to the Ethereum blockchain, which is a critical component of the network’s transition to a proof-of-stake consensus mechanism.
The Beacon Chain, as the name suggests, will function as a separate blockchain from the Ethereum mainnet.
The second phase of ETH 2.0’s rollout, known as ‘the Merge,’ is scheduled to take place in the first half of 2022, and will work to integrate the Beacon Chain with the mainnet – a development that Ethereum investors are excited about.
With Ethereum’s network upgrade underway, the implications of the cryptocurrency’s blockchain’s practicality suggest that ether may gain ground on Bitcoin’s more traditional framework.
As illustrated in the graph above, Ethereum has played a critical role in powering the burgeoning decentralized finance ecosystem. With approximately 7.5 million ETH currently locked into DeFi, Ethereum 2.0 is likely to introduce more scaling solutions and functionality into the space, vastly improving the quality of services produced on the network and increasing the appeal of using Ethereum’s blockchain.
Could a ‘flippening’ happen in 2022?
With the emergence of ETH 2.0 in mind, could the long-awaited ‘flipping’ of Ethereum and Bitcoin occur in 2022? The flippening refers to the moment when the market capitalization of Ethereum exceeds that of Bitcoin.
As shown in the chart above, Bitcoin’s market dominance in 2021 will be at its lowest since the mid-2018 bear market, while Ethereum will account for 19% of total cryptocurrency market cap for the first time since February 2018. Is it possible that the momentum of both coins will soon reverse? Some fund managers believe that ETH is now a better investment.
According to an October survey of fund managers conducted by CoinShares, 42 percent of respondents consider Ethereum to be the asset with the most compelling growth outlook – while only 18 percent consider Bitcoin to be their first choice. Furthermore, ETH is currently held by more fund managers than BTC.
Ethereum’s popularity is growing at a critical juncture in the retail investing landscape, as more investors than ever are choosing to invest in cryptocurrencies.
As evidenced by the data above, the number of blockchain wallet holders worldwide has increased exponentially in recent months – and Maxim Manturov, head of investment research at Freedom Finance Europe, believes that more investment is on the way.
According to Manturov,
“It is important to note that real interest rates in the United States have been negative for a long time.” Even after the (likely) Fed rate hike in 2022, real interest rates will most likely remain negative. This is significant because negative real rates encourage increased trading and speculation in asset markets. To maintain their purchasing power in the face of negative interest rates, Americans will seek income from stocks, cryptocurrencies, precious metals, and other investments and trading instruments.”
With more investment expected as Ethereum continues to improve its network, could more ETH purchases be on the horizon? And could the growing interest in Ethereum pave the way for the cryptocurrency to overtake Bitcoin?
One thing is certain: the cryptocurrency landscape will remain highly volatile for the foreseeable future. This price volatility means that a wide range of unforeseen circumstances can have a positive or negative impact on the price of a coin.
The ongoing ETH 2.0 upgrade, on the other hand, indicates that Ethereum is continuing to improve its framework for its users, and the possibilities associated with its blockchain are expanding. Keeping this in mind, we may soon see a new challenge to Bitcoin’s dominance from its long-term underdog.