Ethereum Price Prediction: Why ETH Is the Best Cryptocurrency in 2018
The recent cryptocurrency crash has bolstered our faith in Ethereum. Ethereum is one cryptocurrency that proved its mettle, while most others, including crypto heavyweight Bitcoin, faltered. Ethereum “Casper,” the Enterprise Ethereum Alliance (EEA), and Ethereum applications are some of its strengths that we’ll discuss in our upbeat Ethereum price forecast 2018. So stay with us.
But first, let’s rewind back to January and assess how Ethereum emerged as the most potent combatant in the cryptocurrency bloodbath.
Why Ethereum May Be the Best Cryptocurrency
The recently witnessed colossal drop in cryptocurrency prices has spooked investors. There is a serious concern that investing in cryptocurrencies is like putting your hand in the lion’s mouth. That concern is genuine. To address it, let’s take off our rose-colored glasses for a while.
There’s no question that blockchain is a revolutionary technology all set to make a mark in history. But the crypto crash 2018 showed us that not all blockchain-based cryptocurrencies are worth the value that exuberant crypto bulls have been ascribing to them.
In fact, many bullish cryptocurrency investors are finally coming to their senses and accepting that most cryptocurrencies are not going to be here 10 years down the road.
Take the example of Barry Silbert of Digital Currency Group (DCG), whose firm launched the largest Bitcoin fund, Bitcoin Investment Trust (GBTC), and is now introducing the Grayscale Digital Large Cap Fund, another investment fund with five crypto holdings—the top two being Bitcoin and Ethereum.
At the Yahoo! Finance All Markets Summit last week, Silbert said, “In the long run, I think there’s only going to be one digital gold. I think there’s only going to be one privacy-focused token. I think there’s going to be one main smart-contract platform.” (Source: “All Markets Summit: Crypto,” Yahoo! Finance, February 7, 2018.)
When he speaks of “one main smart-contract platform,” we feel an automatic pull toward Ethereum. After all, the only other smart-contract platforms we have so far heard of are either “Ethereum equivalents,” “Ethereum competitors,” or purported “Ethereum killers.” Simply put, they are all second to Ethereum. Ethereum remains the leader for entering this niche first.
Why Consider Ethereum Following the Crash?
Now, cryptocurrency prices have historically moved in tandem with Bitcoin. To this day, most crypto prices are expressed in terms of BTC. Bitcoin has a powerful influence on crypto markets. It is the tide that lifts all boats, and also one that runs them aground all at once.
But in January, when Bitcoin and other cryptocurrencies reeled, we saw at least two notable points on the ETH price chart where Ethereum prices decoupled from BTC. Despite the massive crash in prices through the most part of January and early February, Ethereum emerged as one of the very few cryptocurrencies that saw their overall price performance stay green.
Chart courtesy of TradingView.com
So, what exactly is it about Ethereum that is driving investor interest in this digital currency? Here are the three distinguishing attributes that have made Ethereum a top-notch crypto.
Enterprise Ethereum Alliance
To begin with, the most propitious reason why Ethereum stands out as the best cryptocurrency is its partnership with real-world businesses via the Enterprise Ethereum Alliance.
The EEA, which has so far signed up over 500 prominent members, is geared toward promoting Ethereum to global enterprises. Count in Microsoft Corporation (NASDAQ:MSFT), Samsung, JPMorgan Chase & Co. (NYSE:JPM), Intel Corporation (NASDAQ:INTC), Cisco Systems, Inc. (NASDAQ:CSCO) as its notable members.
While there are certainly other cryptos, like Ripple, forming real-world partnerships, none matches up to the repute Ethereum has managed to build in the corporate world.
The EEA put its promotional activities into second gear only recently after it announced the hiring of its first Executive Director, Ron Resnick. With a new commander-in-chief leading the way, the alliance will finally have a formal corporate direction to pursue.
We strongly believe that, in his leadership, the EEA may be able to reach its final goal much sooner, which, as identified by Resnick, is to “evolve Ethereum into an enterprise-grade technology.” (Source: “Enterprise Ethereum Alliance Appoints First Executive Director,” CoinDesk, January 17, 2018.)
Imminent Ethereum Upgrades
Then, there are the two upcoming upgrades that raise our spirits. Let me touch upon both of them.
When it comes to technology, there are two common criticisms leveled at Ethereum. The first is the scalability issue, that Ethereum is slower than some of the newer Ethereum copycats. While the Ethereum platform can process roughly 15 transactions in a second, its newer counterparts can do up to 100,000 (in some cases, more) in the same time.
But Ethereum is working on a solution for that. Founder Vitalik Buterin has recently shared a sneak peek into “Ethereum 2.0″—the next iteration of Ethereum’s technology, which will increase its scale to process thousands and thousands of transactions in a second. This will be a sweeping improvement for Ethereum.
Then, another criticism relates to Ethereum’s “proof-of-work” mechanism for rewarding miners. Bitcoin uses the same mechanism. But as it turns out, this mechanism is becoming dysfunctional.
Proof-of-work is a capital-intensive mining incentive. It requires miners to spend an obscene amount of money on their computer rigs to stay competitive in the mining business.
An alternative is the “proof-of-stake” mechanism which, loosely speaking, rewards miners based on how much skin they have in the game. It’s a reasonable departure from the older proof-of-work mechanism, which is beginning to render Bitcoin and Ethereum slow.
Now, Ethereum’s Casper update will shift Ethereum from proof-of-work to a proof-of-stake network. The testnet for Casper was launched earlier in January. That’s when Ethereum prices spiked despite the ongoing crash. The final update will hit the mainnet later this year. So, we have our fingers crossed as we watch Ethereum take the big strides toward technological improvements. (Source: “ETH Breaks $1k As Casper Testnet Launches,” CryptoCurrency Facts, January 4, 2018.)
Finally, Ethereum’s expanding ecosystem is another reason that puts it ahead of its peers. The number of applications being built on its platform is growing each passing day. As of now, more than 1,050 decentralized applications (DApps) are already running on Ethereum.
The applications have been driving up the transactions volume on its platform and, in turn, the price of ETH. Here’s how Ethereum’s transactions history stacks up against Bitcoin’s.
Chart courtesy of BitInfoCharts.com
Bitcoin transactions, which historically remained higher than Ethereum’s, lost their lead in July last year, beyond which Ethereum overtook Bitcoin. This is another key factor that put a floor under ETH prices through the recent crypto crash. I’ve delved deeper into this aspect here.
Ethereum’s steadfast performance through the cryptocurrency crash proves that this may be one of the best cryptocurrencies to consider. The three aforementioned reasons only reinforce our bullish take on this cryptocurrency.
Our Ethereum price forecast is optimistic as we put a $1,500 price target on ETH. You can follow our daily Ethereum updates and analysis here.