Why more analysts are starting to expect Ethereum may hit $10k long-term

Why more analysts are starting to expect Ethereum may hit $10k long-term

Why more analysts are starting to expect Ethereum may hit $10k long-term

More analysts are beginning to believe that Ethereum could achieve $10,000 to $20,000 in the long-term.

The $20,000 target was first brought upon during this bull cycle by Real Vision Group CEO Raoul Pal. The industry executive noted that Ethereum is following Bitcoin’s growth trajectory based on Metcalfe’s law.

“Oh shit, really? Is ETH identical in price structure to BTC when it had same number of active addresses?? But, but ,I thought it was a worthless shitcoin???” pic.twitter.com/MX5U9IMMJn

— Raoul Pal (@RaoulGMI) January 7, 2021

Ethereum to $10k, is it possible?

For Ethereum to achieve $10,000, it would have to hit a $1.1 trillion market cap. The current valuation of Bitcoin is hovering at $640 million while ETH’s market cap is at around $120 million.

So, proportionally, it would be possible for Bitcoin to reach a multi-trillion dollar market cap, and for Ethereum to follow suit. Pal said:

“But ETH market cap is growing faster than BTC at the same point ( from first 1m active addresses)… Yeah, ETH might well go to $20,000 this cycle… (exact same as BTC last cycle, by market cap ETH will be bigger). BTC = ETH. Fact. Different assets, different ecosystems, same adoption, same behavioral economics = same same but different…”

Ethereum has the potential to reach such a high valuation mainly due to the significant increase in user activity.

In the past several years, particularly before 2020, there was not a lot of users on Ethereum.

It was the explosive growth of decentralized finance (DeFi) that propelled the upwards trajectory of the Ethereum blockchain network.

In mid-2020, the total value locked in DeFi was hovering at around $1 billion. That figure has increased by 21-fold since, and it is now above $21 billion.

Considering DeFi’s rapid growth and the consistent increase in user activity on Ethereum, analysts are becoming more confident in a more aggressive long-term bull case.

A pseudonymous Ethereum research and developer known as “Antiprosynthesis” said:

“Call me crazy, but I firmly believe that $ETH will hit $10k-$20k within the coming 1-2 years. And this time deservedly so. #Ethereum has firmly established itself to become the universal value settlement layer of the internet, backed by an $ETH with maximum demand/supply ratio.”

15-minute Ethereum price chart. Source: ETHUSD on TradingView.com

DeFi could go mainstream

On January 13, Brian Brooks, the U.S. acting comptroller of the currency, wrote an oped on the Financial Times about DeFi. He wrote:

“Banking is headed down the same road. And it’s being driven by the technology behind decentralised finance, or DeFi. But just as the original rules of the road protected us from other drivers, so our current bank regulations exist mainly to prevent human failings.”

Brooks also touched on the possibility of granting banking charters to DeFi protocols in the oped, which is a significant recognition from a key official.

If DeFi sees mainstream attraction i the longer term, it would only strengthen the bull case of Ethereum, especially now that layer two solutions are booming.

DeFi protocols are currently running into scaling issues due to the Ethereum network’s limited capacity. But Eth2 and layer two solutions would offset these issues over time.

The post Why more analysts are starting to expect Ethereum may hit $10k long-term appeared first on CryptoSlate.

Title: Why more analysts are starting to expect Ethereum may hit $10k long-term
Sourced From: cryptoslate.com/why-more-analysts-are-starting-to-expect-ethereum-may-hit-10k-long-term/
Published Date: Thu, 14 Jan 2021 13:50:49 +0000

Why more analysts are starting to expect Ethereum may hit $10k long-term

Why more analysts are starting to expect Ethereum may hit $10k long-term was originally published here https://topnewsscoop.wordpress.com/2021/01/15/why-more-analysts-are-starting-to-expect-ethereum-may-hit-10k-long-term/