After the launch of Ethereum v. 2.0, we might want to know how much impact it has made to the Ethereum network. We might also be interested in knowing what impact DeFi will have on the ETH cryptocurrency and also what analysts have predicted concerning this currency for this year, 2021. This article is set to answer those and more.
ETH Has Only Just Begun
Ethereum alongside BTC, has been at the forefront of crypto waves. For analysts, Ethereum’s market cap is growing at a rapid pace compared to Bitcoin. Ethereum (ETH) price has continued to move higher in the recent days with the price action now approaching the 50% level of the Dec 2017 – Dec 2018 sharp drop.
Indeed, the launch of Ethereum 2.0 gave a strong boost to Proof-of-Stake, even though its rollout was delayed on several occasions. Moreso, while the new upgrade of Ethereum was a key event for PoS adoption, many other PoS networks have recorded huge successes as well.
Ethereum (ETH) price gained almost 60% in November, before adding over 18% in December. Accordingly to analysts, for Ethereum to attain $10,000 it would have to hit a market cap of $1.1 Trillion. As at the time of writing, the market cap of Bitcoin is poised at $676 million in contrast to that of Ethereum which is around $139 Million.
As such, Ethereum has the potential to soar at a high valuation price due to the significant rise of institutional investors’ activity. Since it is evident that the retail investors are manifesting more interest in Ethereum.
This world’s second-largest cryptocurrency, price at press time is presently resting at $1,226.11 with a trading volume of $28.51B, and a market cap of $139 million. Currently, it is bagging over the 7th position in Market Valuation among leading Financial Space.
Optimism of Analysts & Enthusiasts
Ethereum’s price has been predicted by many crypto enthusiasts and analysts across the world. Many are starting to believe that the Ethereum price may hit $10,000- $20,000 long term.
A technical analyst; Raoul Paul, CEO of Vision Group, believes in a bull cycle for Ethereum with $20,000 being the first prediction made during the bull cycle by this analyst. He believes that Ethereum is following Bitcoin’s growth trajectory based on Metcalfe’s law.
In his words;
Call me crazy, but I firmly believe that $ETH will hit $10k-$20k within the coming 1-2 years.
The Impact of DeFi On Ethereum Network
In the past several years, particularly before 2020, there were not a lot of users on Ethereum. It was the explosive growth of decentralized finance (DeFi) that propelled the upwards trajectory of the Ethereum blockchain network.
However, In mid-2020, the total value locked in DeFi was hovering at around $1 billion. That figure has increased by 21-fold since, and it is now above $21 billion.
If DeFi continues to have this mainstream attraction in the longer term, it would only strengthen the bull case of Ethereum, especially now that layer two solutions are booming.
Ethereum’s Prediction for 2021
Malcolm Tan, KingSwap Chief Advisor says that; in 2021 we will start to really see the gamification of DeFi. He states that 2017-2018 gaming was a huge driver of crypto adoption as we saw with projects like WAX, which introduced a marketplace for video game skins and other virtual goods; with CryptoKitties, which nearly crashed the Ethereum network; and with the countless online ‘crypto casinos.’ But this is set to change.
In his words;
Today, DeFi has become a multi-billion dollar vertical. However, it has still yet to fully capture the attention of mainstream users. That will start to change in 2021 as companies make DeFi applications more intuitive and fun to use through gamification. Projects will start tying NFTs to DeFi, allowing people to stake their NFTs to earn rewards, and come up with new and innovative ways to make open finance enjoyable, accessible, and profitable for all.
The gamification of DeFi will also dovetail with the release of Ethereum 2.0. While there are other layer one and layer two protocols driving DeFi’s growth, the ecosystem is still highly reliant on Ethereum. Ethereum 2.0 will potentially make DeFi apps faster and more scalable, which will enable developers to create even more user-friendly and gamified DeFi applications”.
Gillingham in assertion to Ethereum optimistic prediction, reminds that; Ethereum outperformed BTC for 2020, and is already outperforming BTC YTD, hence leaving investors to look at projects beyond, or that are complementary to Ethereum.
Duru Joselyn is a content creator, writer, self development coach and news analyst. She specifically enjoys writing on anything pertaining to cryptocurrency and the blockchain industry. Joselyn is a fun loving Nigerian who not only has a flair for giving information updates; she also enjoys a variety of outdoor activities especially traveling and photography.