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Author: Shane Neagle, CoinGecko; Compiled by: Deng Tong, Bitchain Vision
Ethereum’s market value is second only to Bitcoin, and over the past year, Ethereum has been comparable to Bitcoin at a major turning point.However, over the past year, Ethereum has lagged behind Bitcoin, with the two gaining 31.6% and 85.8% respectively.The potential of Ethereum ETFs has boosted cryptocurrencies, but their gains have been erased.
Although both cryptocurrencies plummeted at the end of July, high expectations for Ethereum ETFs are based on the widespread success of Bitcoin ETFs.Taking these and other factors into account,What price ranges can ETH holders expect in the near and medium term?
What is the price forecast for Ethereum in 2024?
Top analysts, institutions and fund managers expect an average price of $6,404 for Ethereum at the end of 2024.
All eight forecasters are optimistic about Ethereum andETH is expected to rise to between $4,400 and $166,000.CryptoNews has a minimum target of $4,443.63, while Ark Invest’s Cathie Wood has a maximum target of $166,000.While all experts expect prices to rise, only two figures predict that ETH will reach six figures.VanEck predicts ETH will rise to $154,000 on bullish scenario, while Cathie Wood expects it to rise to $166,000.However, most price forecasts are based on longer time frames, with only Bernstein, QCP Capital and Standard Chartered providing time frames within one year.Therefore, their forecasts tend to be at the low end of $6,000 to $8,000, too.
This year,The biggest driver of Bitcoin’s record high of $73,780 is the legalization effect achieved through exchange-traded funds (ETFs).This investment tool opens up the channel for Bitcoin, but does not have the risks brought by self-custody.The same effect is now expected for Ethereum ETFs.However, a survey conducted by Grayscale between April 30 and May 2, 2024 showed a disagreement in sentiment.While 25% of respondents believe that ETF approval will increase Ethereum capital inflows, 25% believe that this will not affect Ethereum’s investment argument.The most important finding in the survey is that funds launching Ethereum ETFs will have a lot of marketing efforts to do, because 43% of respondents are not familiar with the Ethereum ETF concept of spot trading.
Ethereum price forecast analysis
As of August 6,In the past 30 days, ETH’s price has plummeted 15.5%, hovering around $2,600.This is reminiscent of the plunge that occurred after the Fed rate hike cycle began in April 2022.This time, Federal Funds Futures predicts three rate cuts by the end of 2024, with the first rate cut occurring in September with a probability of 82.7%.Depending on the severity of the need to stimulate the economy by rate cuts, this could be a downwind or a headwind.
If the hard landing of the economy leads to a deep market recession, it is unlikely to contribute to ETH’s capital inflows, because weakened discretionary spending will shorten the inflow time.besides,Mt. Gox repayments are expected to bring pressure on Bitcoin selling, which could put further pressure on ETH.also,A few days after the ETH ETF was approved, it was clear that the pressure to “sell news” was brewing as ETH prices fell by more than 10%.
On the bright side, Ethereum not only firmly ranks behind Bitcoin, but also has higher growth potential.According to VanEck’s analysis, its dependence on layer 2 networks, coupled with sharding, makes it a major candidate for absorbing all traffic from multiple use case scenarios.In terms of regulation, efforts are being made to make ETH more decentralized.Lido has the first place with a 29% staking share, launching the Community Pledge Module (CSM) to alleviate centralized concerns and get rid of the title of “safety”.
Overall, analysts and experts agree that ETH prices are on a long-term upward trend, much higher than the current price level of about $2,600.
Potential drivers of Ethereum prices
In September 2022, Ethereum’s profitability weakened and enhanced at the same time after its transition from Proof of Work (PoW) to Proof of Stake (PoS).on the one hand,Being a validator requires staking ETH, which reduces the potential of the network to maintain decentralization.
Likewise, PoS networks are more likely to review transactions because the user’s trust is entrusted to the network validator.This is in sharp contrast to trustless PoW networks such as the Bitcoin mainnet.In addition, Ethereum is an ongoing coding project with a complex roadmap that has the potential to bring unforeseen changes.Therefore, it is more difficult to “sell” Ethereum to potential investors because it poses higher risks.Bitcoin, by contrast, is an extremely conservative digital commodity focused on absolute scarcity and cybersecurity, which is more attractive to investors looking to hedge against currency depreciation.
on the other hand,Ethereum’s PoS brings blockchain expansion into reality and becomes a network of layer 2 networks.On average, the Ethereum network facilitates twice the daily transaction volume that Bitcoin has.Meanwhile, the average transaction fees for Ethereum have steadily declined.With the Ethereum 2.0 roadmap implementing sharding and achieving 100,000 transactions per second (TPS) while Bitcoin has a TPS of 7, a clear picture emerges:
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With approximately 13.9% of the total crypto market share, Ethereum is the proxy for dozens of Layer 2 networks and their respective cryptocurrencies, simplifying the appeal of Ethereum as a major smart contract property to blockchain investors.
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Ethereum will neither lead to inflation nor deflation, and its network activity determines its status.EIP-1559 Token destruction mechanisms usually lead to inflationary periods when network activity decreases, and deflationary pressure is imposed when network demand increases.
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Investing in Ethereum is similar to early holdings of Visa/Mastercard stocks, but targeting global decentralized financial networks.
in other words,Without the maximum supply cap for ETH and the disadvantages of PoS derived, Ethereum may struggle to attract large amounts of capital flowing into Bitcoin.However, the potential of a deep ecosystem of decentralized applications (dApps) hosted by Ethereum may offset these factors, even surpass them.
Ethereum price forecast
The top eight ETH price forecasts are as follows:
All forecasts were made in 2024 and the average is for reference only.* Without Cathie Wood outliers, Ethereum’s average price forecast will reach $6,404 by the end of 2024 or early 2025.
