More and more analysts are starting to believe that Ethereum could hit $ 10,000 to $ 20,000 in the long run.
The $ 20,000 goal was first brought into play this bull cycle by Real Vision Group’s CEO, Raoul Pal.
The industry expert comments that Ethereum is following Bitcoin’s growth path, which is based on what is known as Metcalfe’s law.
Ethereum on $ 10k, is that possible?
For Ethereum to reach $ 10,000 it would need to have a market cap of $ 1.1 trillion. Bitcoin’s current valuation is $ 640 million, while ETH’s market capitalization is around $ 120 million.
In relation to this, it would be possible for Bitcoin to reach a market capitalization of several trillion dollars and Ethereum to follow suit. Pal on this:
“But the market capitalization of ETH is growing faster than that of BTC at the same time (from the first 1 million active addresses) … Yes, ETH could well rise to $ 20,000 in this cycle … (just like BTC in the last cycle, according to market capitalization, ETH will be to be taller). BTC = ETH. Fact. Different assets, different ecosystems, same adoption, same behavioral economy = same, but different … “
So Ethereum has the potential to achieve such a high rating – mainly due to the significant increase in user activity.
In the past few years, especially before 2020, there weren’t many users on Ethereum. It was the explosive growth of decentralized finance (DeFi) that drove the upward trend of the Ethereum blockchain network.
In mid-2020, the total value tied in DeFi was around $ 1 billion. That number has increased 21-fold since then and is now over $ 21 billion.
Given the rapid growth of DeFi and the steadily increasing user activity on Ethereum, analysts are becoming increasingly confident of an aggressive long-term bull case (see Buy Ethereum Guide).
A pseudonymous Ethereum researcher and developer named “Antiprosynthesis” writes:
“Call me crazy, but I firmly believe that $ ETH will reach $ 10k- $ 20k within the next 1-2 years. And deservedly so this time. Ethereum has firmly established itself to become the universal value processing layer of the Internet, supported by $ ETH with a maximum demand / supply ratio. “
DeFi could go mainstream
On January 13, Brian Brooks, the acting auditor for the US currency, published a report in the Financial Times on DeFi. Brooks:
“Banking is on the same path. And it’s driven by the technology behind Decentralized Finance, or DeFi. But just as the original traffic rules protected us from other motorists, our current banking regulations exist primarily to prevent human error. “
Brooks also mentions the ability to license DeFi protocols to a banking license in the report, which is significant recognition from a key official.
The DeFi protocols currently have scaling issues due to the limited capacity of the Ethereum network. But Eth2 and Layer 2 solutions are designed to offset these issues over time.
Proof of text: Cryptoslate
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