Ethereum is one of the most valuable coins in the crypto ecosystem. It has been the 2nd largest by market capitalization for most of its history, and it’s responsible for the growth of the DeFi ecosystem. Recently, the price of ETH has been on the rise. While it’s still unconfirmed, there are rumors regarding spot ETF approvals for the Ethereum coin. The launch of ETFs usually drives the price of cryptos, as happened with Bitcoin earlier this year. According to the Ethereum calculator, the price of ETH is currently around $3,600, a 56% year-to-date growth. Besides that, Ethereum has a series of implemented and planned upgrades that improve the network’s performance. Although a low throughput affected the blockchain a couple of years ago, these upgrades have enabled it to handle more transactions. This way, Ethereum can keep up with the demand and continue to be the top chain with smart contract features.
Analyzing Ethereum’s Performance and Positioning
The price of ETH reached its ATH in November 2021 at $4,891. In the next months, it went down to around $1,000, following market trends. The introduction of the Paris upgrade, which switched the mining algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS) took place in September 2022. The transition to PoS made Ethereum more sustainable since staking is less resource-intensive than PoW mining. After that upgrade, the price started to grow mildly but steadily. During 2023, the price of ETH was relatively stable, with minor gains month to month. But in October 2023, it started to rise quickly, along with other cryptos like BTC or SOL. On March 11th, 2024, ETH rose to $3,881. Two days later, the Dencun upgrade was implemented, which optimizes the network for layer-2 solutions. Transactions on the secondary layer are generally faster and have a lower fee. Although it went down again around $2,800, the ETF rumors drove the price back up to $3,800.
Ethereum’s Upcoming Innovations and Advancements
For the past couple of years, Ethereum developers have been announcing and implementing upgrades. The surge of dApps and DeFi protocols caused the network to overload and suffer from congestion. High fees and slow transactions hindered its performance, and dozens of alternatives were launched to “kill Ethereum.” After the transition to PoS, which marked a major milestone, developers haven’t stopped implementing new improvements. After the Dencun upgrade in March, developers are now focused on the Pectra upgrade. This project will also implement a series of EIPs (Ethereum Improvement Proposals). In this case, EIP 3074 will allow wallets to send batches of transactions. This way, users can make multiple payments at once. EIP 7251, also part of Pectra, will increase the limit for validator nodes. As of now, they can only stake up to 32 ETH, but this upgrade will raise the figure to 2,048 ETH.
The Ethereum Purge, announced by Vitalik Buterin a few months ago, will also be implemented soon. This set of upgrades will simplify the process of creating smart contracts and reduce the data stored on blocks. It will simplify building dApps for developers, and the network overall will be lighter and more efficient.
What Are Ethereum Growth Opportunities?
Ethereum has had a great performance in 2024, and there are factors in the market that could drive it higher. Besides the ETF rumors, that are likely to be real, a court ruling released in May brought hopes to ETH investors. The indictment revealed that the U.S. Department of Justice considers Ethereum a decentralized blockchain.
Another factor is, again, the transition from PoW to PoS. Unlike Bitcoin, Ethereum doesn’t have a set maximum supply. This means that the blockchain will potentially create new coins forever, leading to price inflation. But The Merge introduced a coin burn protocol, reducing the circulating supply and switching to deflationary dynamics.
Bitcoin performance could have an impact on ETH as well since BTC price is often mirrored by the rest of the market. In April, Bitcoin’s mining reward has halved. This process, which takes place every 4 years, tends to increase the price of the asset in the following months. Taking all these factors into consideration, market analysts predict ETH will be as high as $6,500 in 2024. After reaching new ATH this year, it will likely hit the $10,000 mark by 2025.
Conclusion
While Bitcoin was the first cryptocurrency to launch, and is still the market leader, Ethereum’s features cannot be understated. The revolution of world finances wouldn’t be possible without the ability to create DeFi protocols. Exchanges where anyone, anywhere, could participate. Instant lending platforms that don’t have the need for credit scores. And even art ownership, through NFTs. All these markets were improved and extended thanks to Ethereum’s smart contract features, even outside Ethereum itself.
Moreover, a flow of new investors on dApps built on Ethereum means new investments in ETH. So, as the network becomes more scalable and secure with upgrades, new money will enter, and the coin will appreciate more. Although nothing is set in stone, and unexpected events could drive the price down, the fundamentals of Ethereum’s project are strong. So it will always have an intrinsic value.
