More and more analysts believe that Ethereum could hit $ 10,000-20,000 in the long run.
The $ 20,000 target was first set in this bull cycle by Raoul Pal, CEO of Real Vision Group. The industry manager noted that Ethereum is following Bitcoin’s growth path based on the Metcalfe Law.
“Oh shit, really? Is ETH the same pricing structure as BTC if it had the same number of active addresses? But but I thought it was worthless shit ???” pic.twitter.com/MX5U9IMMJn
– Raoul Pal (@RaoulGMI) January 7, 2021
Ethereum up to $ 10k, is it possible?
For Ethereum to reach $ 10,000, it must have a market cap of $ 1.1 trillion. Bitcoin’s current valuation is $ 640 million, while ETH’s market capitalization is around $ 120 million.
In proportion, it would be possible for Bitcoin to reach a market capitalization of several trillion dollars and for Ethereum to follow suit. Pal said:
“But the market capitalization of ETH is growing faster than that of BTC (of the first 1 million active addresses) at the same time … Yes, ETH could well rise to USD 20,000 in this cycle … (just like in the last cycle of BTC, the ETH be larger by market capitalization). BTC = ETH. Fact. Different assets, different ecosystems, same acceptance, same behavioral economy = same but different … “
Ethereum has the potential to have such a high rating mainly due to the significant increase in user activity.
In the past few years, especially before 2020, there haven’t been many users on Ethereum.
It was the explosive growth of decentralized finance (DeFi) that drove the upward trend of the Ethereum blockchain network.
In mid-2020, the total value set in DeFi was around $ 1 billion. That number has increased 21x since then and is now over $ 21 billion.
Given DeFi’s rapid growth and the steady increase in user activity on Ethereum, analysts are more confident in a more aggressive long-term bull case.
A pseudonymous Ethereum researcher and developer known as “Antiprosynthesis” said:
“Call me crazy, but I firmly believe that ETH will reach USD 10,000 to 20,000 in the next 1-2 years. And rightly so this time. #Ethereum has firmly established itself to become the universal value accounting layer of the internet, supported by an ETH with the maximum ratio of supply and demand. “
DeFi could go mainstream
On January 13, Brian Brooks, the acting currency auditor in the United States, wrote a comment on DeFi in the Financial Times. He wrote:
“Banking goes the same way. And it’s powered by the technology behind decentralized finance, or DeFi. But just as the original traffic rules protected us from other drivers, our current banking regulations exist primarily to prevent human error. “
Brooks also touched on the ability to issue DeFi protocols in the OP Bank Charters, which is a significant recognition from a key official.
Seeing DeFi as the main attraction in the longer term would only bolster Ethereum’s bull case, especially now that second tier solutions are booming.
DeFi protocols are currently experiencing scaling issues due to the limited capacity of the Ethereum network. But Eth2 and Layer 2 solutions would make up for these issues over time.
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