During the past couple of years, cryptocurrencies have garnered the attention of every investor, especially after the meteoric rise of currencies like Bitcoin and the Ether. For example, in December 2015, a single Bitcoin was worth somewhere around $440, while the same Bitcoin was worth $2600 when I first wrote this article in July 2017 and was worth $9,500 when I updated this article in 29th of November 2017 and now is worth $12,900. Today Bitcoin was between $12,500 – $14,000 a high fluctuation. This increase over a year and a half can be compared with the one made by the Ether, Bitcoin’s primary rival in the cryptocurrency sector. This article intends to look at 3 Ethereum price predictions for 2018. Speaking of that, 45 days ago Ethereum price was $300 and now is a bit over $700 (not bad right?). While I was updating this article the price jumped to $820. But lets not forget that 25 days ago it was $400.
What are the Ethereum price predictions for 2018?
Keep in mind that attempting to offer a short term prediction for the price of Ether is a difficult endeavor. For starters, the price of a single Ether is so volatile that it can lose 25% of its value in one day, only to regain it in the next. The most recent example is, 35 days ago was a bit under $300 and now is $700. But there was a lot of volatility in the last few weeks with Ethereum going to as low as $550 and back to $770.
This volatility, as well as the novelty of this currency – Ethereum was started 2014 – drain technical analysis from any potency it might have in making Ethereum price predictions for 2018. Rendering any forecast suspicious at best. Therefore, all the following predictions take a long-term look at things.
- The Price of an Ether Will Break the $1000 Benchmark (or $5,000 in my opinion)
When I first wrote this Ethereum prediction for 2018 my colleagues reading this article considered myself crazy, now Ethereum price should reach $1,000 in the next two months. If you ask me, the price of a single Ethereum can go even up to $5,000 by the end of 2018. Ethereum was $10 in January 2017 and now is around $700, do you think thats far from $5,000?
According to the website Investing Haven, the price of an Ether should reach $1000, if not by 2018 then at least by 2020. That is a very conservative Ethereum price prediction for 2018 in my opinion, considering their currency’s fluctuation. The site’s research team bases their forecast on three fundamental factors:
a. The current and future supply of Ethers
There are currently 96 million coins of Ether in circulation. Although this number is likely to increase over the next couple of years, it will probably flatline after that. Which means that the developers in charge of Ethereum will make sure that the number of circulating coins stays constant.
b. Ether applications
The edge Ether has over Bitcoin is the ability to use smart contracts. These are contracts that are automatically executed without any human intervention the instant their terms are met.
However, Ethereum also permits developers to build decentralized apps, also known as dapps, on top of its blockchain technology. Interestingly, the more apps are built, the more valuable the Ether becomes.
The research team at Investing Haven expects that 5 to 7 years from now, we will see a 20 to 30-fold increase in the number of decentralized blockchain apps from the numbers we have today.
c. Ether demand
Demand for Ether will be driven by one of two things. Either for its functionality as a currency that is built on a blockchain with several applications. Or as a possible investment vehicle that keeps appreciating in value.
When it comes to the functionality of Ether, the technology behind smart contracts is what interests people most. However, as we just saw, the building of new applications on top of the Ethereum blockchain will also drive up demand.
- Ethers May Very Well Overtake Bitcoin
I wrote this headline in June 2017, not sure if I should keep it when I will update the article next time. The price of an Ether should outperform that of a Bitcoin for the coming duration. What this means is that a dollar invested in Ether will return a higher ROI than investing the same dollar in Bitcoin. This indeed can be hard to believe in December 2017 when looking at Bitcoin price, but we all know that less than 6 weeks ago it was under $6,000. Most likely Bitcoin its being used by short term investors these days. Also, the assertion is based on the growth of Ethereum between 2015-2017 while Bitcoin was between 2009-2017.
In fact, the CEO of hedge fund Polychain Capital, Olaf Carlson-Wee, is of the opinion that the entire market capitalization of Ethereum will exceed that of Bitcoin by the end of this year. At least, that’s his Ethereum price predictions for 2018.
You can read here my BITCOIN PRICE Predictions for 2018.
There is plenty of evidence to support Olaf’s view. On the one hand, the previously mentioned 20-fold explosion of Ether in 4 months versus the 8.5 times growth of Bitcoin in a year and a half.
Besides that, the fact that Bitcoin has lost almost half of its market share to Ethereum during the past four months. To put matters into perspective, four months ago, 90% of all money invested in cryptocurrency was invested into Bitcoin.
Curiously, this number has dropped to somewhere around 45%. Conversely, Ethereum’s share of the total money invested has increased four times in size, making it approach the 30% area.
Another indicator showing that Ether can overtake Bitcoin can be found by looking at who’s backing each type of currency, as well as why they are backing said currency. Bitcoin’s focus on payment technology makes it popular with governments, such as Japan’s and China’s governments.
On the other hand, Ethereum’s smart contract technology makes corporations very interested in its real world applications. For example, a new coalition by the name of the Enterprise Ethereum Alliance (EEA) has sprung up with the explicit objective of facilitating and fostering the growth of the Ether.
The Enterprise Ethereum Alliance consists of more than 86 firms, including JP Morgan and Microsoft. The endorsement of Ether by such heavy hitters only goes to show the amount of potential in this technology.
- The Future of Ethereum Isn’t All Rainbows and Butterflies
Despite the extremely bullish sentiment most of the market has towards Ether, the cryptocurrency still has some major hurdles to overcome before we can say that it is here to stay.
First of all, Ether might have several differences to Bitcoin, yet it still runs on blockchain technology. This means that the same problems, that all current blockchain technologies face, plague it too, mainly scalability.
When we are talking about scalability, our primary concern is whether the increased number of users will adversely affect the transaction time or not. Simply put, when more people use the technology, there are more transactions up for registering and putting down in the ledger.
This increase in the number of transactions means that any one transaction will wait in a long queue before going into a block. Without going into details, this problem has created what is called the fork problem. And there is no agreement on how to solve it.
Another issue with Ether is the possibility of cloning the technology. After all, any company can start its own blockchain based cryptocurrency tomorrow. The only thing conferring value on any currency is the consensus of the community using said currency.
As a result, it becomes a bit difficult to place one’s full faith in a single digital currency, without worrying about another currency sprouting up and usurping the one we were holding on to.
Naturally, these problems, if left unsolved, jeopardize the future of Ether, hence making any Ethereum price predictions for 2018 problematic. So the question is this: will these issues find solving? Or is a new currency going to come to light that doesn’t have these problems in the first place?