Over the space of last year, Ethereum has been stealing the limelight from Bitcoin (BTC) and is rapidly becoming a popular digital asset in the financial industry. Ethereum is a blockchain, Ether (ETH) being its native token, was developed to support scripting and the creation of decentralised applications and ‘smart contracts’ through its virtual machine (EVM).
Unlike BTC and its rival coin Litecoin, ETH has been adopted across many companies and startups as a preferred transaction method.
In the cryptocurrency wars, we like to view Ethereum as ‘the diamond’ of the currencies. It has both an intrinsic value and an industrial value. Bitcoin, on the other hand, operates like gold – not much industrial value but people buy it and sell it based on its intrinsic value to the holder.
The market capitalization of Ethereum has risen to almost $300 billion over the last few months, just under half Bitcoin’s near-$700 billion.
The price of Ethereum’s coin fell below $1,800 on 23 May 2021 for the first time since 31 March 2021, as the market collapsed by 60% from the all-time high of $4,362 reached on 12 May 2021.
The entire network is going through an important upgrade that might change the way transactions are verified and commissions are charged, and some observers expect the Ethereum price to rebound and advance to fresh highs. How realistic are those expectations? Is now a good time to invest in the ETH market to position your portfolio for substantial gains?
This Ethereum price analysis looks at the recent volatility in the cryptocurrency world, including the reasons behind those fluctuations, as well as predictions for the direction of the coin price for 2021 and the coming years.
What Is Ethereum Network?
It is an ecosystem that works like Bitcoin and gives an opportunity to create decentralised applications based on it.
The miners verify transactions of blocks in the Ethereum ecosystem. They solve math problems and get rewarded for their work in ETH. They also ensure that entries on the blockchain are following its rules.
Smart contracts have been used on Ethereum for a multitude of purposes, including issuing ICO tokens and creating entire decentralised autonomous organizations (DAOs).
Many users incorrectly apply the term Ethereum to describe both the currency and the ecosystem itself. Please, keep in mind that Ethereum is a system. The coin is ETH or Ether.
It is the second-largest digital asset by market capitalization, after BTC. It is an alternative coin designed as a payment method for the Ethereum ecosystem.
According to this month’s research report by Goldman Sachs Ethereum might have a ‘high chance’ of overtaking BTC as a ‘dominant’ store of value.
It is aimed to facilitate the operating of ‘smart contracts’ without any delays, fraud, or third-party interference. This altcoin is one of the most trustworthy and used digital assets, as many organizations around the globe now accept payments in ETH.
ETH can be utilised as a tradable currency. It can also be used to pay for items. However, Ether can be used to power certain features within dApps. For example, when creating a token on the ecosystem or using a smart contract, the developer or user must pay the network in ETH.
Some examples of dApps include micro-payments platforms, reputation functions, online gambling apps, schedulers and P2P marketplaces.
The Early Stages Of ETH
An idea of Ethereum was born in 2013. In the beginning it was developed to augment and improve on bitcoin, expanding its capabilities. Vitalik Buterin, a young IT expert and coder, thought that the community needed a secure network and more functions than Bitcoin had. He was assured that integrating a programming language would give an opportunity to build apps.
This currency was produced in 2015, and more than 11.9 mln ETHs were available for its investors. It was the first example of an ICO in the crypto segment.
Still, at this stage each coin was worth less than $1. Not so long ago, it set the highest price. It is trading above $2,500, and it is the highest price. Sounds impressive, right?
ETH and Smart Contracts
Ethereum provides for this opportunity and the ability to transfer value without third-party interference.
These self-executing contracts will transfer the asset automatically when the conditions of the contract are met. It is impossible to change smart contracts once they have been admitted. This ecosystem within the Ethereum network saves time and funds.
Ether as a Payment Solution
Although still in its infancy, Ethereum technology eliminates certain risks and allows to move funds across wallets instantly with a minimum cost.
Businesses wishing to accept payments in Ethers can do so quite easily by integrating an Ethereum payment gateway, which will enable them to accept these transactions.
With fewer intermediaries involved, operation costs are lower, which alongside with other benefits, makes it a great solution for companies. It makes it possible for millions of firms and websites to integrate ETH as a payment solution.
Ether. The Pros and Cons
It’s important to keep in mind that cryptocurrencies are highly volatile, so your cash can go down as well as up in the blink of an eye – you can lose all the money you put in.
You will find that Ethereum is a widely used technology that has a variety of applications. Prior to investing in it, it is important to research its advantages and disadvantages.
Considering the Advantages
One of the biggest advantages of the Ethereum blockchain is its flexibility. While it is mostly known for hosting ETH, it is also used for nun-fungible tokens (NFTs), decentralized finance (DeFi), and enterprise blockchain solutions.
The good news are – it has applications outside the cryptocurrency world. Even if cryptocurrency itself does not succeed over the long run, Ethereum could still be used in other ways.
In addition, one major criticism of cryptocurrency, specifically Bitcoin, is how energy-intensive it is. In fact, researchers from the University of Cambridge estimate that the Bitcoin mining process uses more electricity than the entire country of Sweden.
Ethereum, however, aims to be more environmentally friendly. Developers of the technology are currently working to address how coins are mined to make the process more energy-efficient. This could give ETH an advantage over Bitcoin, especially among environmentally conscious investors.
Plus, as the Ethereum ecosystem undergoes changes, some of the ETH coins could be destroyed in the process. This could actually be a positive thing for investors, however, because a smaller supply of ETH could make it more valuable and drive up its price.
Understanding the Risks
Despite its flexibility and wide range of applications, there are still risks involved in investing in Ethereum and ETH.
For one, you are almost guaranteed to experience notable volatility, especially if you invest directly in ETH. Cryptocurrency is a risky investment in general because it is highly speculative at this point. Some experts also believe we are in a cryptocurrency bubble and that currencies like Bitcoin and ETH are overvalued. If that is the case, prices could plummet when the bubble bursts.
Also, new laws and regulations could pose a threat to its future. Investing in cryptocurrency can come with hefty taxes, which could limit the number of people willing to invest. In addition, lawmakers are still figuring out how to regulate the cryptocurrency market. This could result in more volatility and greater risk.
Before you invest in ETH, think about your tolerance for risk. Would you be able to sleep at night if your investment fell by 20%? What about 50%? Ethereum is a volatile investment, so be sure you are comfortable with risk before you buy.
Finally, if you do choose to invest in ETH, make sure you have a well-diversified portfolio and only invest funds you can afford to lose. By keeping most of your coins in safer investments, you can limit your risk in the event that Ethereum takes a turn for the worse.
Ethereum could end up being a smart investment, but it is not right for everyone. Be sure to carefully assess the pros and cons, as well as to consider your own tolerance for risk.
Where Can You Buy It?
Are you ready to make your first ETH purchase? If you are interested in investing in Ethereum, and specifically ETH, you need an exchange. Ethereum does not trade on any major stock platform. You can not go to your online discount broker and buy Ethereum. You have to convert it into your wallet.
We have a service suitable for you. We recommend using NeuronEx, which allows quicker and easier access to your cryptocurrency. Let’s dig in!
Accessible Options on NeuronEx
This is a service made for financial transfers: for crypto to fiat and crypto to crypto exchange. You will be able to convert coins more quickly and securely.
It has a user-friendly interface, and its useful tools make the purchasing experience smoother than ever before.
Moreover, it offers more than 200 means of payment, including credit and debit cards, as well as bank transfers.
As a great plus, NeuronEx also has an app accessible for Android and iOS customers. When it comes to mobility and convenience, it is incredibly popular among users. Track currencies, use a converter and manage your budget all in one place.
How Can I Make a Transaction?
It’s pretty straightforward: you may use a converter, available here. Sign up for free, choose the most suitable type from the list of payment methods, and make your first financial transaction.
We have no hidden commission for ETH purchases (for example, ETH/USD exchange). You can buy coins at a good cost and almost zero commissions.
Online Wallet On NeuronEx
And last but not least, as soon as you get Ethers, you need a place to store your funds no matter if you prefer trading or HODLing funds.
Simply put, once you have gained a coin on an exchange, you will need a safe place to store your holdings. Using an online wallet instead of keeping your crypto digital coins with an exchange gives you greater control over your virtual funds.
These wallets provide users with a digital solution for securely storing money and managing digital coins. These online wallets allow users to send and receive coins, store and spend, and also trade cryptocurrencies. Simple!
You may want to try an online wallet accessible on NeuronEx.
It is a good place to store your funds safely and securely. You will be able to access and manage your portfolio in a real-time mode and control your online assets. Make transactions anonymously, convert ETH/USD and send cryptocurrencies all in one place.
You can learn more about what NeuronEx has to offer and find out about important updates here.
Ethereum Price Prediction for 2021
According to CoinCodex, technical analysis indicators for the Ethereum price were bullish at the time of writing, with 25 indicators giving bullish signals and compared with eight giving bearish signals.
At around $2,600, the coin was trading above the three- and five-day simple and exponential moving averages, although it remained below the 10-50 day moving averages. There is short-term support of around $2,268, with resistance at $2,828 and above.
ETH and Its Future
The Ethereum price prediction from Digitalcoin remains bullish, forecasting the price could average $3,722 in 2021 and rise to $4,650 in 2022. Over the longer term, it projects the price could climb to an average of $8,047 in 2025 and $11,671 in 2028.
Ethereum Price Forecast
Algorithm-based forecasting service Wallet Investor has revised down its ETH forecast from the $3,200 level at the start of June to $2,070.95, rising to $2,949.99 at the end of the year. It predicts the price will move back above the $4,000 mark in 2022, ending the year at $4,512.71, then reaching $9,202.42 by the end of 2025.
The Ethereum price prediction from the Economic Forecast Agency, which had projected the price would fall to $2,746 by the end of May, now expects it to end the month at $2,644. It predicts the price will fall to $2,639 by the end of June before taking off to $6,247 by the end of 2021. It estimates the price will peak at $10,997 in October 2022, then fall to $7,863 by the end of December 2022, $6,624 at the end of 2023, and $4,118 by the end of 2024.
Ethereum Price: What Should We Expect?
In the next year or so, Ethereum will experience massive changes to its structure known as Ethereum 2.0. These changes will increase transaction speeds and greatly reduce the cost to move money within the ecosystem. In this update, Ethereum will move to a proof-of-stake consensus system instead of proof-of-work.
At the moment, transactions on the Ethereum network can cost $100 or more, making transactions of anything under that amount impossible and not worth it. After its update, this issue will go away, greatly reducing the barrier to entry and allowing anyone to move money for far smaller fees.
Why does this matter for Ethereum’s price? It matters because, with lower fees, the network is suddenly opened up to many people who could not previously afford to use it. This increased use can help to bolster the decentralized financial ecosystem on Ethereum and, in turn, its price.
Other than moving to proof-of-stake, Ethereum has another update that will change the way transaction fees work and help to lower inflation, thus making it more scarce. The update, called EIP-1559 (Ethereum Improvement Proposal), will lower the volatility of transaction fees by burning a portion of the fees rather than giving it all to miners.
Though this will cause miners to make less money, it will allow more people to use the network for smaller transactions. This update will replace the auction-style system that exists today for a standard rate known as the base fee. Instead of miners setting the commissions the network does, and instead of the fees all going to miners, most of them are burned, helping to lower Ethereum’s inflation rate.
Crypto investors make a prediction saying that upgrade should help the Ethereum ecosystem run at scale, processing lots more transactions at a faster pace and supporting apps with millions of users.
It could also lead to short-term price appreciation. More and more Ether is getting stashed away for a “lockup” period by token holders seeking to become stakers and validate transactions on the new ecosystem. This could, in theory, limit the available supply of Ether.
Those expecting significant investment cited Ethereum’s technological advantages over BTC, in particular the way it is able to power a new wave of decentralized finance (DeFi) applications.
Still, some skeptics remain unconvinced by digital currencies like BTC and ETH. The latest rally has reminded some investors of the 2017 crypto bubble, in which BTC ran up toward $20,000 before plummeting as low as $3,122 a year later. “Bears” say cryptocurrencies are in another bubble that is waiting to burst. But “bulls” are convinced things are different this time — namely, increased interest from institutional investors.
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