Bitcoin and ethereum are the most popular cryptocurrencies today. Or BTC and ETH. Ethereum was only worth $9 in January 2017, whereas bitcoin was worth about $900 at the time. Ethereum has outperformed everyone’s expectations. Especially in 2021. In 2017 nobody had ever heard of DeFi or NFT. Today they are almost household names. What are the predictions on the price of Ethereum in 2022?
Ethereum is worth nearly $500 billion on the eve of 2022. This represents the same as half of the entire market cap of bitcoin. Part of the reason is down to the flexibility of the ethereum blockchain when it comes to integration with dApps, DeFi and NFT projects.
Billionaire investor Mike Novogratz shared on CNBC recently how, “people see ethereum as a technology bet and bitcoin more as a debasement of fiat currency bet”. Novogratz expects challenges surrounding inflation to favour the price of cryptocurrencies into 2022.
Another consideration is ethereum’s imminent upgrade to Eth2. Partially due to the network itself being in such high demand and needing scalability. Eth2 will be able to handle more than 15 – 45 transactions per second.
Another reason for the upgrade is security. But it’s the final reason that will interest investors the most: sustainability. How this exactly works is not that easy to grasp. Ultimately, the network is moving towards being secured by ETH. It will mean that the network will eventually stop using computing power. Also known as ‘staking’. In order to maintain the network.
This promises to dramatically reduce the carbon emissions used in the current mining process. Giving ethereum more value to investors focused on ESG.
Why was ethereum only worth $500 billion in 2021?
It can be confusing looking at all the alternatives to bitcoin. Dogecoin received quite a lot of attention due to the antics of Elon Musk. Bitcoin is almost constantly in the press. Other tokens such as Solana, Polkadot, Cardano or Ripple have all been mentioned through 2021. Some of them have even given impressive returns. None of the other altcoins are worth anywhere near as much as ethereum though.
When Coinbase listed on Nasdaq earlier in 2021, nobody really mentioned ethereum. When we announced the first bitcoin ETF recently, nobody mentioned ethereum either. In fact, even when NFTs started to trend, not many people knew that which blockchain NFTs traded on. Finally, over the last weeks there has been more speculation about what ethereum will be worth in 2022.
Vitalik Buterin is not as outspoken as Elon Musk or a host of other celebrities who have joined the cryptocurrency and NFT bandwagon. In fact, some might call him a little utopian. In a recent talk he explained his own version of the difference between bitcoin and ethereum:
Today bitcoin is available outside the traditional cryptocurrency exchanges and challenger bank apps. Ethereum has slowly joined the party too. Funds such as the Bitwise Ethereum Fund offer investors cost-efficient and secure ways to invest in the cryptocurrency. These funds will attract a more cautious investor who is likely to consider cryptocurrencies high risk. However, they may also mean that ethereum will be worth more in the future.
Ethereum might be considered less risky than other cryptocurrencies though. Due to the lack of ‘Pumping and Shilling’ that goes on around it. Or perhaps it’s investors are a different type of crypto hodler?
What is the value of the ethereum ecosystem?
The ecosystem will be worth $500 billion in 2022. The ecosystem is the spine that links much of the most important blockchains in use today. The first time it became apparent to the average investor was just before the crypto winter of late 2017. At the time various startups and entrepreneurs were exploring with the notion of an ICO. And the tokens one could purchase following an ICO were often available in return for ethereum. Not bitcoin, as many people today might think.
Many ICOs failed. Many of the tokens that started to circulate during crypto winter failed too. But ethereum’s reputation was undamaged. In fact, many developers within the blockchain space came to respect it more due to the use cases it had provided.
Once many of currently available global altcoins had been created thanks to an input of ethereum, it was turn for the decentralized finance (DeFI) ecosystem to get involved.
The founder of Uniswap started his journey into cryptocurrencies because of ethereum. Chainlink, one of the best known DeFi tokens, is also built on the ethereum network.
Just this year, ‘Everydays’ became the first purely digital NFT sold by Christie’s. And it offered to accept payment in ethereum, a first for the 255-year-old auction house.
Ethereum’s ecosystem might be substantially bigger than you thought. So what about the future?
What will ethereum be worth in 2022?
There are more conservative investors who think that ethereum could hit $5k. Others think that $10,000 is more than achievable.
Ethereum is a strong buy on TradingView most days. Some investors on the site draw parallels to ethereum’s astronomic growth spurt in 2017. There are even stories circulating predicting how ethereum may one day overtake bitcoin as the most valuable cryptocurrency. Quite a prediction. A price of $100,000 per ETH by 2025 is another prediction that is offered. Almost nobody apart from central bankers and regulators predict that ethereum will be worth less in 2022.
The question might not be what ethereum will be worth in 2022 though. The question might be ‘what new way will ethereum be used in 2022?’ NFTs crept up on everybody. Nobody really predicted the growth of NFTs. Or that the popularity of NFTs would gain momentum so rapidly. Perhaps there are more ‘surprises’ round the corner. ‘Surprises’ that could improve the value of the cryptocurrency in 2022.
Ultimately, though, ethereum’s vision is all about “a digital future on a global scale” and “grow ethereum until it’s powerful enough to help all of humanity.” Buterin and many others have worked tirelessly to maintain the vision. A vision that means that “ethereum is open access to digital money and data-friendly services for everyone.” And “it’s a community-built technology behind the cryptocurrency ether (ETH) and thousands of applications you can use today.”
Today, most investors aren’t taken in by the rhetoric of ‘community-built’ and ‘humanity’ anymore. They will be more than convinced by the thousands of applications you can use today. How the DeFi and NFT space is evolving.
Their investment will probably be worth more this time next year too. Achieving all of this whilst being sustainable. Looking to the future. And being involved with one of the most successful cryptocurrencies of all time.
Author: Andy Samu
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Disclaimer:
The Editorial Team at #DisruptionBanking have taken all precautions to ensure that no persons or organisations have been adversely affected or offered any sort of financial advice in this Article. This Article is most definitely not Financial Advice.
