Where Ethereum Goes from Here
Aside from Bitcoin, no cryptocurrency is more popular and promising than Ether (the native token of the Ethereum platform). ETH prices exploded by 3,995% since the start of 2017, beating every Ethereum price forecast in the world. Yet, now that it’s time to make Ethereum price predictions for 2018, analysts outside crypto-land remain gun shy…
…and it’s no secret why. They are worried about a bubble in the crypto market cap.
Out of this concern comes a hesitancy that prevents them from saying the obvious: Ethereum prices will continue to rise.
Analysts had the same concern about Bitcoin last year, and look at where BTC prices are today—up by more than 377% this year alone.
Likewise, the Ethereum-to-USD exchange rate will probably keep setting record highs in 2018, regardless of what mainstream analysts say.
If you’re confused as to how those Ivy League-educated analysts could be so wrong, so many times, it’s because they are incentivized towards “cautious predictions.”
Here’s the logic: At worst, they are wrong and you make a lot of money. Whereas, if you lose money, at least you learn that they were right. A cautious prediction keeps them safe.
But a bold prediction—say, that Bitcoin would reach $4,000 when it was trading in the hundreds of dollars—paints a target on an analysts’ back. What if they are wrong? Not only will people lose money, they’ll have someone to point the finger at.
That fear doesn’t apply to me. I did predict that Bitcoin would reach $4,000. And I did it when BTC was trading below $800.00, meaning that my readers had a chance to make tremendous returns.
Now I’m pinning a $1,000 price tag on the Ethereum price forecast for 2018.
5 Tailwinds for ETH Prices
It’s not like my Ethereum price prediction was conjured from thin air. There is a healthy mix of micro and macro factors propelling ETH prices to $1,000.
Some of these factors include:
- The rise of initial coin offerings (ICOs) on Ethereum.
- Development of further use-cases.
- Development of interoperability.
- Increasing transaction volumes.
- Regulatory acceptance of blockchains.
It would be easy to ignore one of these reasons, but only someone glued to a bearish position on cryptocurrencies would dismiss them all. The tailwinds are too obvious.
Things get even more definitive when you dig into the performance of various asset classes. Not counting Bitcoin, digital assets outperformed gold, U.S. equities, global equities, and global real estate. Investors could have made up to 40 times their initial investment.
|Year-to-Date Returns — 2017|
|Global Real Estate||3.2%|
|All Digital Assets||445.0%|
(Source: Yahoo! Finance, CoinCap, CoinDance)
That being said, there are some pockets of the crypto world that require deflating. Some of the initial coin offerings, for instance, are taking place with zero oversight or accountability.
It’s only a matter of time till regulators decide to clamp down on these assets. In fact, it’s already starting to happen.
The Chinese government recently banned ICOs, forcing local exchanges to delist related tokens; Canadian authorities dragged ICOs under the jurisdiction of securities law; and the SEC warned that new rules for ICOs are imminent.
This means the ICO market cannot charge full steam ahead or it’ll get tangled in a mass of red tape. And since ICOs were driving ETH prices higher, this could weaken the currency’s outlook.
I’m not oblivious to these flaws. My Ethereum price forecast acknowledges some downside risk, but it’s important to remember that these flaws, while serious enough to warrant attention, are not fatal.
Ethereum vs. Bitcoin
I am often asked about the relationship between Ethereum and Bitcoin. Most of the questions boil down to the same thing: “Is it zero-sum?”
Investors want to know if Bitcoin’s success means failure for Ethereum, or vice versa. The short answer is “No.” There’s enough room for both ETH and BTC to thrive.
This is partly because cryptocurrencies come in different shapes and sizes. On one hand, you have Bitcoin, which is a store of value that hopes to become a daily-use currency. On the other, you have Ethereum, a blockchain platform built to run applications.
It just happens to have a token as well.
Saying that one will devour the other is like saying the U.S. dollar and British pound cannot co-exist. Of course they can (and do). The only difference is that Bitcoin and Ethereum are not separated by national boundaries, but by purpose.
This much is obvious based on the last year. Here’s the Ethereum price history chart during that period.
Now take a look at the Bitcoin price chart for the same period.
Notice the similarities? Sure, ETH prices were far more impressive on a percentage scale, but it was starting from a lower base. The material point is that both currencies thrived in the same environment. They weren’t alone, either.
The entire crypto market cap blossomed in 2017, shooting up from $17.68 billion to over $164.85 billion. That’s an eightfold increase in as many months.
Headwinds for Ethereum Price Prediction 2018
However, Ethereum isn’t perfect. Like Bitcoin and other cryptocurrencies, it faces scaling issues that won’t be resolved overnight. These issues are thrown into sharp relief almost every time there is an initial coin offering.
The blockchain clogs up, transaction fees start to climb, and it becomes clear how much further we have to go. Having more people interested in Ethereum mining would be a start.
This is truly saying something, considering that Ethereum is “already using a small country’s worth of electricity” for its mining processes. However, with more transactions crossing Ethereum’s blockchain than Bitcoin’s, something needs to be done. (Source: “Ethereum Is Already Using a Small Country’s Worth of Electricity,” Motherboard, June 26, 2017.)
Add this to the fact that transaction fees shot up 918% from the first to second quarter, and it’s clear that we should be a little worried. But try not to worry too much, because this is the bleeding edge of technology. And it always looks like chaos at the bleeding edge.
My Ethereum price prediction for 2018 starts at $1,000. Considering that ETH is currently at around $329.00, this forecast presents an upside of approximately 204%.
Please bear in mind that Bitcoin scored bigger returns than that this year alone, because some people are bound to call me crazy for this prediction. I am not.
My Ethereum price forecast for 2018 is simply the result of analyzing the crypto market and its investment patterns. It has defied expectations time and again.
Only a fool would doubt its potential, given the persistent upward trajectory of Bitcoin. It has cleared a highly visible path for ETH prices, yet the cautious nature of analysts holds them back from disclosing that very fact.