Over time, the cryptocurrency market has been quite volatile. Let's examine if it's worthwhile to invest and which crypto coin appears to be more rewarding.
The Origins of Ethereum in a Nutshell
Today, we know Ethereum as a cryptocurrency designed to compete with Bitcoin, but it struggled for a long period before achieving its initial success.
After failing to obtain agreement that Bitcoin required a scripting language, Vitalik Buterin (founder of Ethereum) chose to establish a new platform. Ethereum is the name we've given it now. Buterin presented the Ethereum platform in 2015 with Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson.
The project split in 2017, leading in the creation of Ethereum Classic (a new version) and Ethereum (original project). The Ethereum currency (Ether) rate climbed over 13,000 percent in the same year, making it the world's second largest cryptocurrency after Bitcoin. The market boom piqued the curiosity of investors and gamblers alike.
Ethereum is sometimes compared to Bitcoin in terms of similarities; nevertheless, Ethereum is a near-Turing-complete, smart-contract-oriented platform that permits the construction of DApps (decentralized applications). Its engine (the Ethereum Virtual Machine) executes smart contracts written primarily in Solidity (a Turing-complete programming language oriented toward security).
Everything is a matter of degrees, so here's a breakdown of the qualities that distinguish Bitcoin from Ethereum:
It's time to go mining. Despite being the world's first cryptocurrency, Bitcoin mining is far more time-consuming than Ether mining. On average, mining one Bitcoin will take 10 minutes, but mining one Ether will take only 15 seconds.
The total number of tokens. When a miner obtains an Ether by solving an NP-class issue, he or she is effectively creating a new one. Meanwhile, there is a finite number of coins available on the Bitcoin platform. Furthermore, it is cut in half every four years. As a result, nodes will eventually hold all Bitcoins.
Price. On Bitcoin, the fee for transaction execution is fixed per byte, whereas Ethereum uses gas, which is price-dependent. Gas costs (as defined by Ethereum) are based on the amount and type of processing power necessary to complete a transaction or DApp.
What Factors Influence the Price?
The price of Ether was expected to skyrocket in 2018, but market conditions are influenced by a variety of variables. It's worth noting that some people profit from cryptocurrency fluctuations. They wait for the coin's price to drop before purchasing it and selling it when the price rises. These bets also impact how much a coin's price rises and falls.
The following is a list of the specific factors that influence market conditions:
The law of supply and demand
A cryptocurrency with a large supply but low demand would see a major price drop or a very tiny price increase, thus finding a balance between these two aspects is crucial. In the opposite circumstance, a coin with a low supply but high demand will see a significant upward rise.
Unlike Bitcoin, which has a supply cap of 21 million coins, Ethereum does not have a fixed market cap. Users are concerned about the possibility of Ethereum inflation as a result of this. Later, in April 2018, Vitalik Buterin proposed that the Ethereum Improvement Proposal be accepted (EIP). The plan is to cap Ether supply at 120 million units, however this has yet to be decided.
The usefulness of a coin is one of the most important criteria that investors examine. The higher the utility, the more likely it is to be bought and sold.
Many people believe Ethereum to be very beneficial because it is a platform that allows users to run DApps to solve problems. TenX, a service that provides its customers with a wallet and a card for cryptocurrency spending, is an ideal illustration of this.
The difficulty of mining
The amount of time and effort put into mining a currency might have an impact on its popularity among investors. While we're discussing two cryptocurrency market behemoths (Bitcoin and Ether), the first has a considerably more challenging network design. As a result, the miner will need about 10 minutes to mine one BTC. When it comes to mining, Ether is less complicated. It takes about 15 seconds to mine one Ether, which has a significant impact on the miner's decision between BTC and ETH.
Even when it comes to Bitcoin price, there are obviously many more aspects that determine a coin's value. Because it was the first cryptocurrency, its ups and downs generally mirror those of others.
This is a first in cryptocurrency evaluation, as it refers to the number of transactions per second (tps) and the system's ability to handle system overflow without causing delays. This is critical for any payment system that is based on security, as cryptocurrencies are. Bitcoin can currently manage 7 tps, but Ethereum can handle up to 15-20 tps. Other cryptocurrencies can achieve higher speeds, but they come with their own set of drawbacks.
Despite Ethereum's present low tps capacity, it is likely the only project that works on all aspects of scalability at the same time. Plasma and Plasma Cash are incredibly successful initiatives in terms of execution, as they enable sidechain scalability akin to Bitcoin's Lightning network. EVM will improve its capacity with bandwidth and parallel programming, while the Raiden project is in the process of introducing the potential of network sharing.
The Casper protocol will introduce Proof-of-Stake consensus, while also taking into consideration the benefits of other PoS or dPoS systems now in use and boosting the total number of transactions per second (tps). The Ethereum team is looking into zk-SNARKs technology to see if it can improve the network's privacy and tps output. This technology will be scalable enough to compete with the largest cloud providers if all of this is deployed.
Ethereum Coin Trends in the Past
Despite the fact that Ethereum is a new blockchain, it has already survived two hacking attacks: one in 2016 and the other in 2017. Those controversies, however, did not prevent the Ethereum project from gaining widespread acceptance. Despite huge financial losses, the project's weak spots were exposed, and it became more secure as a result.
We can say that the first rate increase occurred in March-January 2017, based on our analysis of Ether price since its inception. The price of Ether increased by 500 percent in the first quarter of 2017, and then fluctuated before reaching a high of $1,417.38 USD in early 2018.
Let's take a look at how the price of Ethereum has performed in 2017. We can conclude that 2017 was a successful year based on the graph provided by Coindesk. Ether began the year at $7 USD and steadily increased in price until it peaked near the end of the year, as seen in the graph:
Price Analysis for the Year 2018
Unlike in 2017, when the ETH rate began to grow (see chart 1), Ethereum's price began to rise in 2018 and has since undergone two major drops. Ether, on the other hand, is thought to be a relatively stable cryptocurrency.
This year appears to be full with surprises. Take a look at this Ethereum price chart, which shows the price of Ethereum so far this year:
It becomes evident that the price of Ether has been trending downward. This has been linked to volatility in the last nine months. The Ether began the year with a high of $1,404 USD in January and a low of $369 USD in April. In May, there was another spike to $831 USD, but as the graph shows, it fell down to $173 USD in September.
Ethereum, like any other cryptocurrency, is characterised by its swings.
Another issue is the phenomena of initial coin offerings (ICOs) and the erratic nature of their market. Many ICO projects try to collect funds and transform them into cash as soon as possible. Various government bodies around the world have been attempting to restrict the behaviour of ICOs for the past nine months. As a result, many previous ICOs have already ran out of cash, and the number of ICOs that may employ Ethers as a means of payment correctly has dropped. This has put downward pressure on the price of Ether and altered its volatility.
Price prediction articles are mostly read by speculators and investors. Speculators, unlike investors, are focused in near-term ups and downs. Investors are more prone to consider the long term perspective. This post is intended for people who want to invest rather than profit from market swings.
Ethereum Coin Forecasts for 2018
Consider the following chart from ethereum.org:
According to this resource, Ethereum's price will most likely exceed $500 USD by the end of 2018, despite the fact that a big sum of money is at stake.
According to some estimates, Ether will be worth $2,000 USD by the end of 2018, citing to the fact that the price of Ether was $10 USD in January 2017 and then sky-high at $770 USD. Even still, Ether would need a market cap of $200 million to achieve $2,000 USD. The current market capitalization of Ethereum is $25.8 billion, according to the most recent study. With this in mind, we doubt Ethereum will surpass the $2,000 USD mark by the end of the year.
Based on the data above, there is a more than 50% chance that Ethereum will surpass $300 USD before the end of 2018. Given the volatility, Ethereum stock forecasts imply that the price could reach this level multiple times by the end of 2018.
Price of Ethereum in 2020
Experts predict that if you own Ethereum now or plan to buy it in the near future, you will make a profit of over 500 percent by the end of 2020.
Despite the present Ethereum price and its downward trajectory over the last few months, long-term forecasts appear to be optimistic. Ethereum will reach $724 USD by the end of 2020, according to Longforecast. According to experts, the price might fluctuate between $474 and $672 in the coming months.
Another Ethereum coin prediction looks much brighter. Coinkir predicts that Ether will grow to $1,488 USD by the end of the year, starting at roughly $720 USD in 2020. According to Coinkir's scale, Ethereum's price is projected to start the year 2020 at $720 USD and climb slightly until April, when it is expected to boom. Ethereum's value projection, according to Coinkir, predicts a price of $1,488 USD in December 2020. This resource's data is based on technical price analysis. This takes into account previous trends and tries to predict which ones might occur again in the future.
Price of Ethereum in 2020
Another prediction has been made by Smartereum, and it appears to be rather radical. According to the report, Ethereum will reach $2,500 USD by the end of 2018, and $31,000 USD by the end of 2020.
Consider those data in the context of Ethereum's rate history, as it is a quickly growing cryptocurrency with enormous potential. When we consider the following three elements, we can arrive at this conclusion:
The rise in smart-contracts utility is due to an increase in the number of DApps and the engagement of more enterprises in DApp use.
The more popular a platform is, the higher the coin's price. With the increasing number of smart-contract users and DApp initiatives, it is clear that Ethereum's future price projection is optimistic.
Predictions for Ethereum in the Long Run
The price of Ethereum is directly affected by demand and supply, as previously stated. Both are steadily increasing as more and more investors want to utilise the Ethereum blockchain. As a result, Ethereum price forecasts for 2025 and 2030 are quite optimistic.
Price Prediction for Ethereum Classic
Following the hard fork on Ethereum, which resulted in the emergence of two cryptocurrencies (ETH and ETC), each pursued its own route to success.
For the time being, the ETC rate is $10 USD; however, the ETC value is expected to double in the future.
The price of Ethereum Classic is expected to hit $20 USD in 2019, according to data given by WalletInvestor.
Is it worthwhile to invest in Ethereum Classic? Yes. The annual profit is expected to be 82 percent. Is there a risk that the price of Ethereum Classic will drop? No. Despite its oscillations, ETC is expected to expand and double in the coming years, according to the report. However, there is no indication that it will skyrocket in the foreseeable future.
Will Ethereum Become the First Cryptocurrency to Dethrone Bitcoin?
We're now talking about two cryptocurrency market behemoths: Bitcoin, which is currently valued $6,402 USD, and Ether, which is currently worth $210 USD. The disparity appears to be enormous, so let's look at it from another angle.
Bitcoin is a digital money that can be mined and transferred between nodes. It's now all about acceptance. Will we be able to use Bitcoin to pay for milk at the corner store?
Ethereum, on the other hand, is geared for decentralised applications that address specific problems. In addition, TenX provides an Ether wallet and card.
The majority of initial coin offerings (ICOs) generate revenues in Ether, which is then transformed into fiat currency. This is an opportunity that should not be overlooked.
Ethereum has a lot of promise, including the fact that it is the only credible alternative to Bitcoin.
More information about this subject can be found here.
Is It Worth Putting Money Into?
Ethereum was created with the intention of being the first distributed cloud and the primary marketplace for DApps. If you're going to make one, it's a good idea to start putting aside some Ethers immediately. As a speculation instrument, Ethereum is protected by all of the initial coin offerings (ICOs) that have been established on top of it, as their volatility is higher and there are more arbitrage gains. In the long run, Ethereum has enormous potential for future growth and should be included in any high-risk investment portfolio.
Risks to Consider
Risk has always been associated with financial investing. Now is the time to confront them, as you need to know your adversary's name and face. Here's a rundown of the potential dangers of investing in Ethereum:
After the public sale, ICOs increase the supply of Ether, but this will alter, as many ICOs previously had usage lock-ups.
Many updates raise Ether's demand, yet owing to the technology's novelty, there will be numerous tests. This will increase volatility every time a new update is released.
Casper will lead to PoS, which will lower Gas fees, resulting in lower demand for Ether from the ICO and DApp communities. This will be a sporadic reduction.
Enterprise-scale hybrid chains will be introduced through Plasma, Plasma Cash, and Raiden, allowing enterprises to incorporate Ether in their value chains while also increasing demand for Ether.
Throughout its lifetime, Ethereum has had a lot of ups and downs. Long-term Ethereum market estimates are much more positive than those for this year, despite its recent trend of dropping prices.
Ethereum, according to experts, will pass the $1,500 USD barrier before the end of 2020. This will result in a profit of over 500 percent for the company's shareholders.
The price prognosis for Ethereum Classic for 2018 and beyond is similarly encouraging, as experts expect it will double every year, generating an annual profit of over 80% for its owners.
Both ETH and ETC are worth considering for investment, but investors should be aware of a number of hazards.
The Cryptoauxiliary team would be pleased to answer any queries you may have not been able to find answers to in this post.