Ethereum’s price has grown significantly since January 2022, reaching high values. But what led to this change? Some say that the increase in Ethereum’s value has appeared thanks to speculations about a potential spot Ethereum ETF, an idea that emerged after the introduction of spot Bitcoin ETFs.
Additionally, people are optimistic about Ethereum’s future due to the successful implementation of the Capella Hard Fork and Shanghai upgrade, which increased its value quickly. Ethereum price prediction looks positive, as the second-largest cryptocurrency could finally reach the $4K mark. Here are some good factors that could drive its price upward.
Increasing interest from people
One of the main reasons behind the rise in Ethereum’s price is the increasing interest of people both in the digital coin and in the innovations brought by the blockchain, including decentralized finance (DeFi), smart contracts, and NFTs. For example, DeFi applications allow people to borrow and lend digital coins, which have attracted a lot of interest lately, thus driving more demand for Ether. Plus, more major corporations have become interested in digital coins, which drives demand for the second-largest digital currency by market cap. Large companies, like JPMorgan Chase and Microsoft, have become interested in the Ethereum network, which has increased individuals’ confidence in investing in Ethereum.
A reduced supply in the crypto exchanges
Another thing that pushed Ether’s price upward is the reduced supply on crypto exchanges. Individuals who buy digital currencies can keep their cryptocurrencies in exchange wallets or opt for a cold storage wallet. Now, the data shows that people have started withdrawing their digital currencies from crypto exchanges, meaning that investors don’t intend to sell the digital coin soon, as they expect a price increase in the future. This happened in October 2023, when people withdrew the digital coins from the crypto exchanges, which accompanied a 130% raise in the price of Ether.
The Dencun Upgrade
The Dencun Upgrade, which occurred in March, can also increase the price of Ethereum, as with this upgrade, Ethereum improves its efficiency and scalability. The Dencun upgrade comprises two different upgrades, “Cancun” and “Deneb,” and it will introduce the notion of proto-dank sharding, which reduces the cost of transactions because of layer two solutions. The upgrade has brought positive changes in the price of Ethereum, as the virtual coin has increased its value since the upgrade occurred.
The Spot ETF
People have perceived the approval of the spot Bitcoin ETF as a major milestone in the crypto industry, as this proves that BTC is an important asset, and more individuals will be able to invest in the largest digital coin without involving the complexities of the crypto technicalities. The spot Bitcoin ETF approval made people believe that an Ethereum ETF approval is next to come. Additionally, all the hype surrounding Bitcoin for the spot ETF event can be a catalyst that could push the prices of Ethereum upward.
Staking
Ethereum functions on a Proof-of-Stake consensus mechanism, where validators must stake at least 32 ETH to make the blockchain function and validate new transactions. At first, Ethereum functioned on a Proof-of-Work (PoW) model, but it changed as this consensus mechanism raised concerns about the negative impact that this measure would bring to the environment because of the huge electric consumption that the mining process required. However, the transition to the PoS model made Ethereum more interesting to investors, thus increasing its price.
If 2023 and 2022 were years when Ethereum experienced a drop in staked assets, 2024 could be a better year, as it already looks positive, which could benefit investors from a long-term bullish outlook. Additionally, an increase in staking could reduce sell-side pressure on the crypto market. Usually, investors stake the tokens they don’t intend to sell in the future, expecting the prices to grow.
How can Ethereum perform in the future?
Ethereum is not only a blockchain that powers Ether, the native coin of the network, but also a platform with a lot of capabilities, as it has many features, including dApps, NFTs, smart contracts, DeFi, and others.
Even if, in the past, Ethereum prices seemed to drop, now it looks like the prices are going upwards, and ETH could reach $5,000 by the end of 2024. However, the future looks bright for 2025 as well, where ETH will have an average of $5,500, a maximum of $6,500, and a minimum of $4,500. In 2030, Ethereum might even experience a maximum of $20,500. In 2030, Ethereum could finally hit the $10,000 mark, where the price will go on an upward trend. This is why ETH might even be able to surpass its all-time high of $12,000 levels and prepare the crypto world for a new record.
Can Ethereum outperform Bitcoin?
As the crypto space is very volatile, every scenario can happen, which is why people have even said that Ethereum might be able to outperform Bitcoin. Ethereum is a unique blockchain, and because of this, it will have a stable future and might perform better than the largest crypto king. Still, it is not very likely that Ethereum will surpass the price of Bitcoin, but it is more probable to reach a comparable market capitalization because ETH doesn’t have a capped supply, unlike Bitcoin.
Conclusion
Ethereum is the second-largest digital currency by market cap, after Bitcoin, and because of all its innovations and capabilities, Ether is here to stay. As Ethereum goes through continuous growth with all the constant upgrades, people believe that both 2024 and the following years will be good for the cryptocurrency, as ETH will probably become more popular, increasing investors’ confidence.
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