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October 3, 2022
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Analysts believe Ethereum could reach $ 10,000 in the long run

Analysts are beginning to believe that Ethereum could reach $ 10,000 to $ 20,000 in the long run.

The $ 20,000 target was first raised during this upturn by the CEO of Real Vision Group, Raoul Pal. The industry executive noted that Ethereum is following Bitcoin’s growth trajectory based on Metcalfe’s law.

Ethereum at $ 10,000, is it possible?

For Ethereum to reach $ 10,000, it would have to reach a market capitalization of $ 1.1 trillion. Bitcoin’s current valuation is hovering at $ 640 million, while ETH’s market capitalization is around $ 120 million.

Therefore, proportionately, it would be possible for Bitcoin to reach a market capitalization of several trillion dollars and for Ethereum to follow suit. Pal said:

“But ETH’s market capitalization is growing faster than BTC at the same point (from the first 1 million active addresses)… Yes, ETH may well reach $ 20,000 in this cycle… (just like the BTC in the last cycle, by market capitalization ETH will be higher). BTC = ETH. Fact. Different assets, different ecosystems, same adoption, same behavioral economy = the same, but different… ”

Ethereum has the potential to achieve such a high rating due to the significant increase in user activity.

In recent years, especially before 2020, there were not many users on Ethereum.

It was the explosive growth of decentralized finance (DeFi) that drove the upward trajectory of the blockchain network Ethereum.

By mid-2020, the total amount blocked in DeFi was around $ 1 billion. That number has increased 21 times since then, and is now over $ 21 billion.

Considering the rapid growth of DeFi and the consistent increase in user activity on Ethereum, analysts are becoming more confident in a more aggressive long-term case.

An Ethereum developer known as “Antiprosynthesis” said:

“You can call me crazy, but I firmly believe that ETH will reach $ 10k – $ 20k in the next 1-2 years. And this time deservedly. Ethereum has firmly established itself to become the Internet’s universal value settlement layer, supported by an ETH with maximum supply / demand ratio. “

DeFi may become popular

On January 13, Brian Brooks, the currency controller in the United States, wrote an article in the Financial Times about DeFi. He wrote:

“The banking sector is following the same path. And it is being driven by the technology behind decentralized finance, or DeFi. But just as the original rules of the road protected us from other drivers, our current banking regulations exist primarily to prevent human error. “

Brooks also mentioned the possibility of granting bank licenses for DeFi protocols in oped, which is a significant recognition by an important employee.

If DeFi sees the main attraction in the long run, it would only strengthen Ethereum’s positive argument, especially now that layer two solutions are growing.

DeFi protocols are experiencing scaling problems due to the limited capacity of the Ethereum network. But Eth2 and tier two solutions would make up for these problems over time.

Source: cryptoslate

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