I'm a big fan of ETH and BTC alike, and feel happy when members of both communities forge ties rather than bash the other side - we're all on the same side: pro-crypto adoption and success.
That said, as an investor in both ETH and BTC, I wonder if we have a good view as to why $500 may be a logical short-term ceiling for ETH to touch in August:
I'm as nervous as the next person about how the BTC blocksize debate plays out, especially now that we have an actual August 1 calendar date requiring something possibly seismic. So while it's always been smart money to diversify within crypto - especially where the platform AND currency makes sense and attracts Fortune 500 investors - there is likely more hedging against BTC via conversion to ETH and other crypto. There was a similar mood going into March as the SEC decision on the ETFs loomed.
Let's assume the best measure of success of a cryptocurrency is its market cap - (units mined) x (unit price) - skipping for now the debate over whether that's accurate - it's a relative measure anyway, if you use the same formula for all cryptocurrencies - in the way that even a broken scale can tell you whether you're losing weight.
If ETH matches BTC's market share, this would mean ETH would trade at roughly 1/6 of BTC's unit price (92M ETH mined vs 16M BTC mined). It doesn't matter if ETH moves from 24% of all crypto up to 46% - or if they meet somewhere in between.
If that's the case before August 1 because of jitters and BTC sell off that's reinvested in ETH - then BTC would likely drop in price somewhat (there's also a ton of rest-of-the-world BTC good news simultaneously, but a hard fork would be ruinous) - but before August 1, let's say BTC drops to $2,500 - then ETH would exceed $400 if the two reach market cap parity.
But THAT occurrence and news coverage - ETH matching BTC's market cap - on top of the plenty rest-of-the-world ETH good news - would likely continue the ETH's favorably tilt, for even more new investors putting fiat into ETH as a first-choice crypt (and perhaps a higher percentage of new crypto investors would choose ETH over BTC) - this would allow ETH to trade at, say 1:5 or 2:11 of BTC price - hitting $500 in the process shortly after August 1.
If ETH is viewed as the superior crypto (many of us already do) - but if the Wall Street Journal and CNBC have a slew of ETH articles - then the laws of supply and demand should control how high ETH could go beyond $500. The BTC-only crowd's biggest knock on ETH is its supply and continuing new supply (although, compared to Ripple, are 92M really that many?) and a more centralized control of the Ethereum blockchain. But, going back to the first point, we all should be rooting for the success of both ETH and BTC.
As BTC and ETH remain the top two cryptos, their relationship with each other seems a compelling relevant source of 'prediction' - and no matter how many stories I read about BTC's declining market cap share, I think that's a good thing - since BTC + ETH = 72% of the crypto market, and some 800 other coins (excluding Ripple) share a mere 15% of the entire field.
BTC's success is always going to have a good effect on ETH in the big picture, and perhaps vice versa - maybe BTC will end up the 'store of value' and ETH be the cover charge of these amazing, dynamic blockchain applications that can redefine the legal, medical, real estate, financial, and (see Singapore) governmental transactions. It's all good and all promising.
So let's see ETH at $500 this summer, and beyond $500 after that. Or maybe it will all collapse. Nevertheless, no matter what, how much, and what percentage of each you're holding/hodling - I hope it's a profitable run for us all.
Don't forget to follow me at @randomizer for more cryptocurrency posts and more technology articles. I submit posts about AR / VR, AI, Machine learning etc... so stay tuned. :)