The cryptocurrency Ethereum lost almost 80 percent in the current bear market. Thus, the currency fell from its ATH, which was formed in October 2021 at just under $ 4,800, to under $ 1000. In the last few days, however, the price has been able to recover a little and clearly overcome the $ 1000 mark again. Therefore, the question arises whether the price will continue to rise in the future and whether an investment in Ethereum makes sense. The following 3 reasons could be in favor of this.
The Merge – Ethereum switches to Proof-of-Stake
The merge represents the connection of the existing layer of Ethereum (mainnet) with its new proof-of-stake layer, the beacon Chain. By switching from proof-of-work to proof-of-stake, energy-consuming mining becomes superfluous. As a result, energy consumption and mining fees can be drastically reduced and Ethereum will become both more scalable, secure and sustainable.
If you compare this procedure with the largest cryptocurrency Bitcoin, this is quite an advantage. Because the biggest argument that speaks against the two currencies is the high power consumption. There have already been discussions at EU level that have considered banning the proof-of-work mechanism.
One document states, for example, about the switch from Ethereum to the more climate-friendly proof-of-stake method: “If Ethereum is able to switch, we could legitimately do the same from [Bitcoin] require. We need to ’protect’ other crypto coins that are more sustainable.” These phrases fell at a virtual meeting between Swedish and EU officials in November 2021.
Thus, it becomes clear that the switch to proof-of-stake not only brings technical advantages in terms of low fees, but also a change of image is the case. The ”climate-damaging” cryptocurrency is now climate-friendly and thus attracts new investors on board. Because if social acceptance increases, it is only a matter of time before the course also reflects this. In addition, one can see from the exchange of words at the EU level that the understanding of Ethereum is much greater than for Bitcoin. This could bring further advantages with an upcoming regulation.
Blockchain Adaptation is Progressing
2021 had 3 big hype topics: DeFi, NFTs and the Metaverse. Nevertheless, we are still in the early stages of these issues. The major adaptation of the blockchain in the mainstream should still follow. This could already be the case in the next few months. NFTs are also becoming more and more well-known in the mainstream and prices are rising continuously.
Almost all of these applications are supported by Ethereum or have even become possible through the Smart contract platform. Thus, the Ethereum blockchain stands for innovative progress. So it is only a matter of time until either already invented technologies such as NFTs are further developed or new technologies are invented on the Ethereum blockchain.
Due to the possible technical innovation, Ethereum is developing a great potential. No other blockchain has produced as many new inventions as this one. Therefore, it is quite realistic that Ethereum can continue to establish itself and also become interesting for the mass market.
Ethereum Performance in Recent Bull Markets
Ethereum has always been able to rise extremely in the last bull markets. In the last bull market, the currency was able to increase its ATH by almost 400% against the old one. In concrete terms, this means that the price has risen from about $ 100 to over $ 4,800, which corresponds to an increase in value of over 4,800%.
Since then, Ethereum has been in a bear market and lost almost 80% of its value. If you compare this with the last bear market in 2018, there is even room to the downside, in which the currency lost over 90%. If this pattern repeats, the bottom could be between $700 and about $1000.
If Ethereum forms a bottom here and gets back into a bull market, price targets of about $7,000 to $10,000 are not unrealistic. Already in the last bull market, Ethereum performed similarly well thanks to new inventions, and if this should happen again, a price increase of 1,000% is quite realistic.