After experiencing a significant rally in 2023, the price of Ethereum has reached approximately $1,900, edging closer to the notable psychological level of $2,000.
Advocates of Ethereum assert that the cryptocurrency winter of 2022 has come to an end, and the recent shift from a power-intensive proof-of-work verification model to a more energy-efficient proof-of-stake model has addressed a crucial obstacle to Ethereum’s scalability.
In contrast to Bitcoin, Ethereum has outperformed it by more than three times in terms of returns over the past three years. However, skeptics of Ethereum raise concerns about potential challenges due to rising interest rates and the possibility of facing stricter regulations compared to Bitcoin, especially if the Securities and Exchange Commission classifies Ethereum as a security.
The launch of EDX Markets, a new crypto exchange with the support of prominent entities like Charles Schwab, Citadel Securities, and other Wall Street firms, could drive increased interest in Ethereum in the coming weeks. Notably, Ethereum is among the first four cryptocurrencies available for trading on this platform.
During the course of 2023, Ethereum prices have already seen a rise of over 50%. Nevertheless, the outlook for monetary policy, further clarity on crypto regulations, and the expansion of decentralized applications (dApps) on Ethereum’s programmable blockchain will likely determine the potential upside for the second half of the year.
Will ethereum rise in 2023?
The surge in Ethereum (ETH) prices this year can be attributed to several factors. One significant driver has been the easing inflation numbers, creating a favorable environment for cryptocurrencies. Additionally, the successful completion of the highly-anticipated Shanghai upgrade played a crucial role. The upgrade marked the final step in Ethereum’s transition to a proof-of-stake model, eliminating energy-intensive mining from the network.
Despite concerns about a potential sell-off when locked-up coins were released after the upgrade, ETH prices remained resilient and even exceeded $2,000 for the first time in eight months. This rally was further fueled by renewed institutional interest in cryptocurrency exchange-traded funds (ETFs). Several prominent ETF issuers, including Grayscale, Direxion, Roundhill Investments, Bitwise, and Valkyrie, filed for approval to launch ETH futures ETFs in May.
However, the U.S. Securities and Exchange Commission (SEC) has yet to approve an ethereum futures ETF, and they have been cautious about crypto spot ETFs due to investor safety and fraud concerns. Nevertheless, BlackRock’s move to file for a bitcoin spot ETF in June indicates a renewed interest in cryptocurrency funds from institutional players. A positive change in the SEC’s stance on ETFs could have a major bullish impact on crypto prices.
Taking a technical analysis perspective, Akash Girimath, a crypto analyst, points out a bullish ascending triangle setup for Ethereum. This formation suggests a potential 45% price increase upon breaking the horizontal resistance near $2,000. If ETH manages to surpass this level, Girimath forecasts a medium-term target price of $2,915.
As Ethereum’s price becomes squeezed at the apex of the triangle, Girimath anticipates a volatile breakout, which could significantly impact ETH holders and traders. These factors combined could further fuel the 2023 ethereum rally, providing potential opportunities for investors and traders alike.
Ethereum price history
The ethereum blockchain came into existence in July 2015 and initially traded at less than $2. However, it gained significant momentum when bitcoin prices soared and cryptocurrencies gained mainstream attention in late 2017.
During this period, ETH prices rose from $100 in May 2017 to over $1,000 in January 2018, especially after the introduction of bitcoin futures contracts by CME Group in December 2017. Notably, CME later introduced ethereum futures contracts in September 2022.
After reaching its peak at around $1,300 in January 2018, ethereum faced a sharp decline and dropped to less than $100 by December 2018 as the crypto market frenzy subsided.
The COVID-19 pandemic in late 2020 sparked a renewed interest in crypto trading, causing the price of ethereum to surge to all-time highs, reaching $4,865 in November 2021. However, a sell-off triggered by rising interest rates affected cryptos and other risk assets in 2022, creating chaos in the crypto market.
During this time, several stablecoins, including Luna and TerraUSD (UST), suffered significant setbacks, and crypto exchange FTX and other players faced bankruptcy protection due to fears of contagion in the industry. As a result, investor sentiment was low heading into 2023.
However, in 2023, ethereum experienced a revival due to a successful network upgrade and an improved economic outlook. Despite its price volatility, Mark Fidelman, founder of Fanatics Media and SmartBlocks DeFi, believes ethereum’s success in the past decade is unmatched in the crypto space.
Fidelman highlights that ethereum not only surged in value but also played a crucial role in pioneering decentralized finance (DeFi) and non-fungible tokens (NFTs), making it a true game-changer in the industry.
Ethereum price stats
Ethereum’s price has a well-known history of being highly volatile and unpredictable, just like the rest of the cryptocurrency market. Nevertheless, in 2023, the momentum for Ethereum has been positive, and there are compelling reasons for investors to believe that its value will continue to rise in the years ahead.
One significant advantage that sets Ethereum apart from Bitcoin is its utility. While Bitcoin primarily functions as a store of value and a medium of value transfer, the Ethereum blockchain offers a unique platform for dApp developers. This has enabled developers to create and run a wide range of applications, from other cryptocurrencies to NFT trading and smart contracts, including various DeFi applications.
Despite Bitcoin’s dominance in the overall crypto market, Ethereum’s utility and decentralization have allowed it to maintain its leading position among altcoins. The Ethereum ecosystem boasts more than 1,870 active developers, surpassing the combined numbers of the next three most active blockchain ecosystems, as of June.
In the NFT market, Ethereum is by far the most popular blockchain for sales. In fact, the number of NFT sales on the Ethereum network is more than three times that of the Bitcoin blockchain and approximately eight times that of any other blockchain, according to CryptoSlam.
Furthermore, Ethereum’s transition from proof-of-work verification to a different model potentially makes it more scalable and appealing to investors and developers who are concerned about the environmental impact of cryptocurrency mining. This shift aligns with the growing interest in Environmental, Social, and Governance (ESG) standards, especially among institutional investors. If Bitcoin fails to meet these standards in the future, Ethereum could become the preferred alternative for popular Wall Street funds.
Apart from its utility value, Ethereum stands out as the only cryptocurrency, alongside Bitcoin, that has futures contracts trading on the Chicago Mercantile Exchange. These futures contracts allow investors to buy or sell Ethereum at a predetermined price on a future date, offering a high degree of leverage that can amplify returns.
Institutional investors, in particular, find futures trading attractive, as Ethereum futures can act as a valuable hedge against Bitcoin positions. However, it’s essential to note that trading Ethereum futures also introduces an additional layer of risk on top of the already high volatility and inherent risk associated with cryptocurrencies.
Can ethereum reach $50,000?
Market experts have high hopes for Ethereum’s long-term price potential. Tyler Winklevoss, the founder of Winklevoss Capital Management and the crypto platform Gemini, predicts that Ethereum’s global market capitalization could one day rival that of gold, which was over $10 trillion in 2021. Based on this prediction, some anticipate an Ethereum price target of around $80,000.
However, it’s worth noting that Winklevoss and his twin brother Cameron have made bold crypto price predictions in the past, including a forecast for Bitcoin to reach $500,000 in August 2020, which raised eyebrows in the industry.
Unlike Bitcoin, the Ethereum network generates revenue, allowing analysts to use fundamental analysis to model the appropriate price of the Ethereum token.
Matthew Sigel, head of digital assets research at VanEck, foresees Ethereum network revenues rising from $2.6 billion annually to $51 billion by 2030.
VanEck believes that Ethereum prices could potentially reach $50,000 in the future, but they don’t expect this milestone to be achieved in the short term.
According to their assessment, if Ethereum captures a 70% market share among smart contract protocols, the token price could reach $11,800 in 2030. This is discounted to $5,300 today, using a 12% cost of capital derived from ETH’s recent beta.