When talking about cryptocurrencies two names seem synonymous, Bitcoin and Ethereum and while the price of Bitcoin seems to be soaring higher than ever, it is Ethereum that most investors are turning to for a cheaper and most likely better alternative.
But before you invest are you looking for a forecast about its pricing in 2018 and beyond? Will it rise to the expected $1000 or more? Or is it likely to fall?
Well, let’s find out.
Is the Current price justified?
Ethereum saw a significant rise from its initial value in the last year and is currently priced around the $400-$450 but I believe it’s still just a beginning and it has a long, long way to go so if you feel you have missed out on bitcoin bandwagon, ether offers the perfect alternative.
Below are some events I believe are going to shape the future of Ethereum for the next couple of years at least.
- More Ethereum based DAPPS & ICO’s
- A switch to Proof-of-Stake protocol (Serenity Update)
- Metropolis Update
- Plasma Framework
Smart Contracts make Ether an attractive platform for DAPPS and ICO developers as compared to most other blockchains. An increase in Ethereum based DAPPS and ICO’s means more daily transactions which in turns increases the price.
While most cryptocurrencies including bitcoin function on a Proof-of-Work protocol switching to a Proof-of-Stake protocol (Casper, as Ethereum, calls it) will definitely give Ether the edge over most coins.
Here validators (people with a stake in Ethereum) receive transaction fees for every transaction they validate. This fastens transactions and requires far less energy than regular mining. It also reduces threats of a 51% attack and increases blockchain scalability through sharding.
With the Metropolis update Ethereum aims to introduce ZK-Snarks (the ZCash crypto engine) which increases anonymity as transactions details like sender, recipient, amount etc. can be hidden.
Secondly, Account Abstraction will make wallets safer as they’ll be less prone to being hacked. And while gas charges become more predictable, mining becomes difficult as rewards are lowered from 5ETH to 3ETH (call it the onset of the proof-of-stake protocol).
The steep smart contract fee is a huge blockade to Ethereum’s scalability as it increases transaction times and that is what the plasma update aims to solve. With the restructured framework, smart contracts are going to be whole lot safer and faster.
Predicted Positive Events
- The new mode of payment
- Increased corporate support
- Ether becomes the new Gold/Silver
Wish you could make payments in Ether rather than your MasterCard or VISA? Well, in the future that’s highly likely. The scalability, speed, and security of ether means it is VISA’s toughest competition and while it won’t completely replace it, ether certainly seems like the future of cashless transactions.
In other words, it will match the scale of VISA in 2-3 years but don’t just take my word for it, Vitalik Buterin, the Ethereum founder believes it too.
Leading tech giants like J.P. Morgan Chase, Microsoft, Accenture etc. together formed the Enterprise Ethereum Alliance. Being backed by these corporates is certainly a huge boost to Ether’s price and with more such companies soon to join the party it looks like Ethereum has all the big backing it needs to sore high.
While comparing Ether to gold, silver or other precious metals might seem bizarre it is anything but as there are quite a few similarities.
Firstly, they are both valuable assets to the society and used for trading. Secondly, both have an active market and are not reliant on a specific country and lastly, their supplies are limited.
So does that mean you should invest everything into crypto? I would say hedge your risk, invest in both. While crypto has its flaws, gold has existed for over a hundred years and is here to stay.
- Wallet Bugs
- Increased Competition
- Ether being dumped on digital exchanges by ICO’s (Hedging)
- Government interference
- Bubble Burst
One of the major factors that may cripple the growth of Ether are critical wallet bugs or exploits. That’s why ether has a team of experienced developers in place that ensures everything is tried and tested before letting it out the public. Also, with the upcoming updates in the pipeline, Ethereum seems well equipped to tackle any such issues.
Government policies and laws can have a serious impact on any cryptocurrency with China’s latest ban on exchanges and ICO’s and NEO’s sudden price dip being the latest example of it. While it’s highly unlikely that other major countries like the US, Russia etc. will take a similar stance, there’s always a question of WHAT IF.
With the crypto buzz at an all-time high more coins like IOTA, NEO, Monaco etc. have come into the foray but considering Ethereum already has an efficiently functioning blockchain in place I don’t believe developers will look to switch to other blockchains and with the smart contracts coming in to play, it’s going to be a game changer.
For those not familiar with hedging, it simply means mitigating the risk by ‘hedging’ your crypto for fiat money or other assets. This in turn negatively affects the price of ether.
A bubble burst isn’t something that’s directly related to ether but crypto in general and can affect any currency’s pricing.
What does the future hold for Ethereum?
Crypto Kitties have taken the digital world by storm and at one point resulted in about 15-20 percent of the total ether transactions.
In the short term, it has certainly proved a challenge to the scalability of Ethereum, clogging up the network resulting in slower transactions and a slight dip in price but the Casper update should prevent such issues in the future.
Ethereum price in 2018
And with the fever around Crypto Kitties yet to peak it surely seems like the killer DAPP that shoots up ether’s price to about $800-$900 by early 2018 eventually reaching the $1000-$1200 mark by the year’s end considering they resolve the scalability issues.
Ethereum price in 2019
Also, with more advanced DAPPS and other real-world applications turning to Ethereum’s blockchain the price should further rise to about $2000 in 2019.
Ethereum price in 2020
Lastly, if as predicted, Ether bridges the gap between VISA and becomes a mode of payment, price in 2020-2021 could reach as high as $5000 or more.
The crypto market is a bag full of surprises, shocks and awes and that is what makes it so interesting and for people looking to invest in Ether, it certainly seems like now is the time to do so.
And if you’ve still got more money to invest, Enigma (ENG Token) is definitely one to be considered. Read about my personal investment in ENG here..
In case you feel I have missed on an important piece of information do feel free to drop a comment below.