The crypto market is one of the best-performing asset classes this year. Platform blockchains have particularly had a good year due to the surging interest in decentralized finance (DeFi). Ethereum, for instance, rallied from around $100 in early 2020 to highs of over $4200 at the peak of Bull Run April 2021. It also rebound from recent pullback and has now risen above its all-time high price point but with ETH holding steady near current prices does it make sense to buy? Analyses dive deep into Ethereum’s metrics which can help answer that question.
Ethereum Is in A Transition
One of the biggest changes Ethereum is going through right now is transitioning from Proof-of-Work to a more energy efficient proof system. In addition, gas prices have been made predictable and fixed so that there’s less volatility in price fluctuations for transactions on this blockchain. All these transitions are important because they’re making it easier for developers to build their DAPP or create other applications using Solidity as well as make operations cheaper by reducing costs associated with mining Ether tokens or Ether itself.
Ethereum is likely to draw in more investments from environmentally-conscious investors, and there are many of them in the developed world. There’s also a chance that with scaling down its biggest issue Ethereum will attract even more DAPP developers than ever before compared to other projects hoping for blockchain dominance. However, it has maintained this title since establishing itself as top platform blockchain without any competition yet after overcoming scalability problems. Therefore, Ethereum has what it takes to increase its dominance by many multiples from its current position by overcoming these issues. This could in turn add to its intrinsic value by a huge margin, and the same could reflect in its price.
Ethereum Is Scarce
The scarcity of cryptocurrencies is one of the most important factors to its value appreciation. Yet, there are limits on how scarce a currency can be before it will stop gaining in value. One way that Ethereum has tried to implement this element was by increasing difficulty over time so as not too many coins enter circulation at once, but now with Ethereum 2.0 they’ve created an even more complicated system which could lead future Ethers being extremely hard for miners and users alike to acquire or trade into existence properly.” This is a factor that could see its value rally significantly in the future as its adoption grows. It could be a good move for investors who believe in this project to buy Ethereum now, with the next 5 to 10 years in mind. However, it is essential to remember that cryptocurrencies are still in their infancy and highly volatile.
Ethereum Is Tested and Proven
Ethereum’s scalability issues are not unique, they’re just more prevalent than on other blockchains because of the amount of usage it has. If all their competitors were operating at full capacity like Ethereum is, then there would be flaws emerging everywhere too! This explains why dapps continue to choose Ethereum despite its limitations; developers know that these limits are well-known and something is being done to solve them (despite what critics say).
There is an element of predictability and security in Ethereum that will keep drawing developers towards it. With DeFi expected to become a trillion-dollar market, the intrinsic value of the blockchain can only go up going ahead.
Lots Of Institutional Adoption for Ethereum
Institutional money has been a major factor in the growth of cryptocurrency markets and is expected to play an important role for many years, but this flow isn’t distributed evenly across all cryptocurrencies. A lot of it’s been flowing into Bitcoin and Ethereum, likely because there are more financial products targeting institutional investors on these two networks.
Almost all the major institutional investors have invested in digital currencies. While Bitcoin ETFs were rejected by regulatory bodies, Ethereum received its first green light for an exchange-traded fund (ETF) on June 26th 2018 from VanEck and SolidX Partners Inc., which is a U.S financial service company that specializes in providing investment services to institutional customers. This indicates the increasing interest of institutions towards cryptocurrencies like Ethereum, whose value might increase significantly going into 2019 with these developments.
