Every time there is a conversation about cryptocurrencies, it is impossible to skip on Ethereum.
Ethereum is one of the biggest cryptocurrencies and comes second only to Bitcoin. However, despite that, people often seem to neglect this cryptocurrency giving more attention to its counterparts.
Familiar with middle child syndrome? The term refers to a situation when a family tends to neglect the achievements of the middle child no matter how well it performs. If the crypto industry was one big family, Ethereum would sure have ended up being its middle child. Between January 2020 and January 2021, ETH trounced bitcoin with a nearly 750% return . Even then, it received less attention than Bitcoin or its closest cousin in terms of market cap - Ripple.
Ether, the coin which runs on the blockchain platform that we call the Ethereum blockchain, has soared several times over the lows it created when it plummeted during the COVID market panic of March 2020. Data analysts affirm that this remarkable rise in value is due to the excess money flowing into all the leading cryptocurrencies, with the increasing popularity of cryptocurrency investment. And ever since the Ethereum 2.0 update , it’s been going on the second run of sorts!
So, what does this mean for you? And should you start wondering about holding investments in Ethereum?
This post will answer all these and many more questions that you might have about Ethereum. So, if Ethereum investment is a concept that has long confused you, sit tight, and read on!
Why is Ethereum Going Up? In May 2021, ETH broke past all its previous records to set a new all-time high upwards of $4,000. This was the first time Ethereum had crossed even the $3,000 mark in the coin’s history. As of May 3rd, when the Ethereum price stood still at $3,110, several cryptocurrency analysts predicted that Ethereum would continue rising. And it did, until the $4,000 mark. On September 24th, ETH’s price again saw a nearly 10 percent exchange value spike, a major one after its major rise in May. Even though its price did plummet in the months in between, the losses were recouped in a run it began in July - close to the London Hard Fork. As many would concur, there are many reasons behind the price rise of Ethereum:
1.Firstly, the price of Ethereum and most major cryptocurrencies in the market follow the price of Bitcoin as it rises and goes down. Over the past year, thanks to the pandemic, Bitcoin saw some substantial gains while Ethereum lagged in comparison. Cryptocurrency experts speculated this ETH rally was just ETH catching up with the gains of Bitcoin. 2.One of the primary reasons for the rise in the price of Ethereum is the surging popularity of DeFi (Decentralized Finance). Ethereum hosts a lot of DeFi projects on its blockchain network with most of the activities including DeFi happening on it. This has and still is fueling the rise in Ethereum prices in the crypto market. 3.Besides, Ethereum has been developing many updates to its software and has plans to introduce ETH 2.0, an update that is all set to be rolled out by end of this year or early 2022 will make transactions faster, fees lower, etc. This new development has made people further intrigued about its growth potential. 4.The rise in Ethereum prices is also partly due to increased institutional adoption as shown by data. More and more institutional investors are looking at ETH as a store of value according to the Annual Review by Coindesk.
At the time of writing this post, on October 9th, the price of Ether stood at 2,71,099.25 INR. This rise in Ethereum could be because of its technological advantages over competitors like Bitcoin and other altcoins. The fundamentals, as the market calls them. Here are a few: 1.Firstly, this cryptocurrency acts more like a platform token than a coin. 2.Secondly, it solves the age-old problem of speed. While a Bitcoin transaction takes about 15 minutes to be completed, ETH can do the same in almost fifteen seconds. An attribute that is of great value in this fast-paced world. 3.Lastly, it has theoretically shown that it has an unlimited supply (annual maximum supply of 18 million ETH) compared to Bitcoin's 21 million coin cap. In this sense, Ethereum is more likely to replace Fiat currency than Bitcoin.
Future of Ethereum In an article by Forbes, it was predicted that Ethereum could reach $19,842 by 2025 (which is 14,88,150 INR approx.) - a 400% increase from its current price. These statistics were predicted by an expert panel that included Coinmama's Chief Executive Sagi Bakshi and ConsenSys Head Economist Lex Sokolin and was surveyed by personal finance comparison site Finder, which pointed to the soaring popularity of decentralized finance (Defi) and NFTs giving them a greater use case than Bitcoin. At the same time, long-awaited upgrades to Ethereum, begun at the end of last year and designed to help Ethereum scale and reduce its sky-high costs, could help it reach new potential. It is quite a known fact that the future of Ethereum wasn't always so bright. In June 2016, the infamous DAO hack had sent $55 million of Ether into hackers' hands. The rise of altcoins like Bitcoin Cash and Ripple (at the time) did threaten Ethereum in the vast universe of crypto coins. Still, Ethereum has again found its foothold in the market over the last four years, and the current statistics are a testimony to that.
What’s Next For Ethereum? The current run from Ethereum shows that it has quite a promising future to offer and surely a vast potential that yet needs to be explored. One can buy Ethereum (ETH) directly with Indian Rupees on WazirX , India’s leading crypto exchange.
This article is authored by Pratik Ahuja, Senior Manager, Marketing at WazirX
