Ethereum price cracks USD 1,000 – How much potential does ETH have?
Ethereum (ETH) was invented by Vitalik Buterin and is a great blockchain for smart contracts, dapps and even token creations. The picture shows a metal coin of Ethereum in front of a price curve.
The Ethereum price is on the heels of Bitcoin’s record-breaking upward movement in recent weeks. The largest altcoin with a market capitalisation of 115 billion USD has risen by almost 50% within the last week and exceeded the magic limit of 1,000 USD.
The Ethereum price is currently showing its strong side. The last time this price level was reached was in February 2018. At that time, the Ethereum price reached the previous all-time high of just under USD 1,450.
Ethereum is on the verge of a big change
Due to the strong volatility of the Bitcoin price, the Ethereum price is currently fluctuating around USD 1,000. Since the sharp drop in March 2020, the ETH price has risen by more than 900%, outperforming BTC.
At this point, one should not forget that the risk with Ethereum is much higher than with Bitcoin. This is not only due to the high dependency on BTC, but also to the update to Ethereum 2.0, which is expected to be completed in the next few years.
In the process, ETH will switch from the Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus algorithm. So the danger is not only in the change itself, but also in the higher uncertainty due to PoS. Currently, no one knows whether the security around Ethereum and the values stored in the various smart contracts will be sufficient.
DeFi TVL on ETH continues to rise massively
Currently, almost 18 billion USD are deposited in the various DeFi applications on ETH. This is also one of the possible reasons why the Ethereum price has risen so sharply.
If this value continues to rise, the Ethereum price should follow suit. At least there has been a strong correlation in the past.
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Ethereum with a lot of potential
In addition, ETH is to become deflationary through a new EIP (Ethereum Improvement Proposal). With EIP 1559, part of the transaction fees will be wiped out forever, reducing the number of ETH in the long run.
Nevertheless, Ethereum does not have a maximum number like Bitcoin. Therefore, it is still unclear how the circulating number of ETH will develop in the future. The inflation rate could change in the future. Therefore, Ethereum is not a store of value and has different characteristics than Bitcoin.
Whether the Ethereum price will reach its old all-time high again and perhaps march in the direction of 2,000 or even 3,000 USD is currently impossible to predict. However, with the growing interest in DeFi, Ethereum should also gain attention.
In addition, many new investors are currently entering the cryptospace and are often oriented towards Coinmarketcap and Co. Therefore, it is to be expected that a lot of fresh money will flow into ETH. We are curious to see how the Ethereum price will perform in the coming weeks and months and will keep you up to date.
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