on the crypto
When I was a kid, I always looked at the tabloids on the shelf at the supermarket checkout. The headlines often referred to celebrities and UFOs (not necessarily in different stories). Another common topic of the articles in those periodicals was the future, predicted by almost famous psychics. From what I remember, very few of their predictions actually came true. But the headlines were always fun to read.
I recently thought back to those days when I came across an Ethereum price prediction (quotation ETH). Unidentified "cryptocurrency experts" predict that Ethereum tokens will be sold for at least $ 48.357,62 (to be admired the level of accuracy: down to the cent) by the end of the decade.
To put this prediction into context, Ethereum tokens are currently trading for less than $ 1.900. But could Ethereum really go up 26 times by 2030?
Historical precedents
When considering Ethereum's recent performance, it could be concluded that it is not possible that the digital token can guarantee a return of 26 times within the next eight years. However, this is not an impossible hypothesis, if history teaches us anything.
When Ethereum launched in July 2015, its ability to support smart contracts was a game changer for the cryptocurrency world. Although the token price plummeted in the beginning, it didn't take long for Ethereum to take off. As of May 2017, Ethereum had risen more than 26 times.
There has been a lot of volatility in the years since. Investors were taken on a roller coaster as the price of Ethereum rose, then fell, then rose again and fell again. In 2021, however, the cryptocurrency market experienced a surge and Ethereum reached its level again.
By mid-April 2021, Ethereum had risen another 26 times from its May 2017 level. It has since returned much of those gains. However, Ethereum has clearly shown that it can offer 26x higher returns.
A potential scenario
Could Ethereum repeat itself? I believe there is at least one potential scenario where another 26x gain is possible.
This scenario begins with the upcoming Ethereum merger. The merger of the Beacon chain with the Ethereum mainnet will support stakeout and improve the energy efficiency of the blockchain. It will also pave the way for the introduction of shard chains (potentially in 2023). This phase of the Ethereum upgrade will lead to much lower transaction costs and significantly higher capacity.
Ethereum is already the second largest cryptocurrency in the world by market capitalization, after Bitcoin. The update could attract more developers to the Ethereum blockchain. This would inevitably act as a great catalyst for the price of Eth.
It's not too hard to imagine Ethereum becoming a de facto standard for decentralized application (dApp) development any more than it is now. I could see it oust Bitcoin from its place as the first cryptocurrency. And if dApps realize their potential with Ethereum as their primary base, we could see a third 26-fold climb.
Low probability
Now a reality check. While it is possible that the forecast of Ethereum reaching $ 48.357,62 by 2030 will come true, I will be the first to recognize that the likelihood of this happening is low.
To reach this level, Ethereum's market value would have to exceed $ 5,8 trillion. This is more than the combined market capital of Apple, Microsoft and Amazon today.
I believe that the Ethereum merger and subsequent upgrade phase bodes well for the prospects of the blockchain. However, there are many rivals that offer interesting advantages.
Of course, I grew up reading predictions like the US Air Force will reveal that it has an alien spaceship hidden in a desert facility. My impression is that Ethereum has a better chance of achieving a 26x return by 2030 than the UFO's prediction of coming true.
