The price of Ethereum — the second-largest cryptocurrency by market value after Bitcoin — is expected to be at US$4,596 by the end of the year, according to the average forecast from a panel of finance and crypto experts surveyed for Finder’s most recent Ethereum Price Predictions Report.
The Finder panel predicts that Ethereum will deliver stronger returns compared to Bitcoin this year, with Ethereum to increase by 157% by year-end, compared to a Bitcoin price increase of 122% to US$66.284.
The panel was also more bullish on Ethereum’s price in the medium and long term, predicting that the price of Ethereum will go up to US$17,810 — almost four times their prediction for 2021 — by the end of 2025 and US$71,763 by 2023. Ethereum is currently trading at US$2,244, as of publishing time.
The panel convened by Finder — a data and analysis company headquartered in Sydney — comprised 42 fintech specialists, including Bobby Ong, co-founder of CoinGecko, Lee Smales, associate professor of finance at the University of Western Australia and Konstantin Boyko-Romanovsky, CEO and founder at Allnodes.
According to Finder, Boyko-Romanovsky predicted that Ethereum’s price will exceed US$5,000 by the end of the year, and he summarized the reasons why: “Upgrading to a deflationary type of asset, Level 2 networks, institutional adoption, mass utilization, DeFi and DApps’ continuous development and rise are all contributing factors to Ethereum’s future price appreciation.”
The flippening: Will Ethereum overtake Bitcoin?
The so-called “flippening” — the moment in time when Ethereum overtakes Bitcoin by market cap — could happen within the next five years, according to 58% of the Finder’s panelists.
“Fundamentally, Ethereum is more ‘useful’ and so has greater utility than Bitcoin,” said University of Western Australia Associate Professor of Finance Lee Smales, according to the report. “Ultimately, this should lead to its value exceeding that of Bitcoin.”
About 10% of the panel thought the flippening would take longer to happen — possibly 2040 and beyond. However, one in three experts held the view that Ethereum’s market cap would never surpass that of Bitcoin’s.
“We believe Bitcoin will always reign king, but Ethereum will continue to grow market share until Bitcoin’s next major market cycle to 9 figures and higher,” Nicholas Mancini, a research analyst for Trade the Chain, is quoted as saying in Finder’s report.
Will Ethereum be more widely transacted than Bitcoin?
A majority of the panelists said that Ethereum would become more widely transacted than Bitcoin, with 38% saying it would happen within the year, 10% saying it would happen by 2022 and 45% predicting it would happen in 2023 or later.
Justin Hartzman, the CEO of CoinSmart, told Finder that he was “not sure about whether Ethereum will flip Bitcoin, but it will definitely be more widely transacted.”
“People don’t like transacting with BTC, since it’s more of a store of value,” Hartzman said. “Ethereum, on the other hand, has built a full-on multibillion dollar ecosystem, so the frequency of ETH transactions is definitely going to be a lot more.”
More than 70% of Finder’s panelists believed that Ethereum moving to a proof-of-stake model would give it an edge over Bitcoin. But the majority of the panel also felt that Bitcoin should not move to a proof-of-stake model.
Ethereum, founded six years ago this week, is in the midst of a series of upgrades to be more scalable, sustainable and secure as it transitions from a proof-of-work to a proof-of-stake consensus mechanism. The Beacon Chain upgrade, implemented in December, was the first Ethereum 2.0 upgrade, and brought staking to the Ethereum ecosystem. “The Merge” — Ethereum mainnet’s merge with the Beacon Chain’s proof-of-stake system — will mark the end of proof-of-work Ethereum and is scheduled to take place later this year or next year.
Ethereum’s much anticipated London upgrade, which incorporates Ethereum Improvement Proposal 1559 (EIP-1559) that is meant to bring a more predictable base fee for transactions — is expected to go live on August 4.
Will Ethereum be overtaken by other altcoins?
There are now over 160 million unique Ethereum addresses as of today, July 27, and there is over US$93 billion in total value locked in decentralized finance (DeFi) on Ethereum. Alongside the explosive growth of DeFi, NFTs and stablecoins on Ethereum, scalability and high gas fees have been persistent problems, and competitor blockchains — so-called “Ethereum killers” — have emerged in the marketplace.
But just over half of the panelists surveyed fully expect Ethereum to retain its dominance in the long run.
“It suggests that another coin may eat into ETH’s market share without overthrowing its dominance entirely,” the report said.
“Many of the other chains are looking to just be ETH killers. There needs to be a stronger proposition than just trying to beat a Layer 1 solution by being cheaper and faster, because Ethereum will solve these problems soon too,” CoinGecko co-founder Bobby Ong is quoted as saying. “Other Layer 1 chains would have to find unique use cases to stand a chance at succeeding.”
Buy, sell or hodl Ethereum?
Now is the right time to buy Ethereum, said the majority or 63% of Finder’s panel.
Brighton Business School senior lecturer Paul Levy predicted that Ethereum would see significant growth compared to Bitcoin due to its “reputational and potential innovation taking place in energy efficiency,” according to the report.
But University of Canberra senior lecturer John Hawkins disagreed and told Finder that Ethereum was a “speculative bubble and will get dragged down by Bitcoin.”
Just one in 10 of Finder’s panel advised to sell Ethereum, while 27% said to hold.
While the cryptocurrency prices have cooled from their highs earlier this year, the crypto market rallied in a short squeeze on Monday with Bitcoin almost reaching US$40,000 amid speculation that Amazon would go into crypto following a job vacancy the company posted for a “Digital Currency and Blockchain Product Lead” for its “Payments Acceptance & Experience” team. Amazon has since denied that it would be offering crypto payment services to its customers.
Bitcoin and Ethereum kicked off this week with one of the highest upside days since May, Justin Chuh, a senior trader at Wave Financial, wrote in a weekly market update. “However, I’m not seeing volume paired with price action to confirm, but maybe we’re in a new regime.”
“BTC and ETH are still within their sideways channels, we’re just on the higher side now,,” Chuh wrote. “BTC was already rejected again by its 200 day moving average, just like in early June… ETH is also facing a familiar wall at $2,400, once more at $2,800, and will probably stay highly correlated with BTC.”