Ethereum faces weekend rout, but some see ETH doubling from here

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Ethereum, the most traded cryptocurrency after Bitcoin, had a bad weekend. Have no fear, crypto bulls. The market is still long term bullish for ETH. It seems to be the consensus. Marc Cuban says he “eclipses even Bitcoin”.

“There has been a relentless spot bid on ETH for several weeks, but open interest has only recently started to follow the price increase, meaning there are fewer over-leveraged positions, compared to what you would expect after such a strong rally, “said Andrew Moss, Managing Director of GSR Capital. “This dynamic is similar to the price action we saw in December and January for Bitcoin,” he says, seeking an explanation for Ethereum’s Dogecoin-like gains.

A flaw in the armor arose last week and this weekend, mainly due to Elon Musk’s transfer to Bitcoin for Tesla
TSLA
auto purchases and the Colonial Pipeline ransomware action that demanded payment in Monero, considered to be untraceable cryptocurrency. These two securities were headwinds for most of the most widely traded cryptocurrencies.

Ethereum, priced at around $ 250 not too long ago, hit an all-time high of $ 4,362.35 earlier this month before reversing. It was trading in the midst of $ 3,000 on Sunday afternoon.

Investor interest in this coin has taken it to astronomical valuation levels. I think we can call it ridiculous.

TBEN reported on May 10 that Ethereum’s market cap is approaching that of JPMorgan Chase
JPM
, currently valued at $ 474 billion.

The Ether Gathering this year added some $ 300 million to the wealth of Russian-born Vitalik Buterin, co-founder of Ethereum and the world’s youngest known crypto billionaire.

Everyone is there to be like Vitalik. I don’t own Ethereum. I have asked some investors to convince me why I should.

Ethereum… Moon?

Ethereum’s growth is attributed to a growing number of developers building Decentralized Finance (DeFi) applications on the Ethereum blockchain platform. The rise of non-fungible tokens (NFTs) is also increasing the demand for Ethereum.

Finally, the continued institutional interest in treating crypto like any other security also helps ETH. Coinbase is the new NYSE. ETH is # 2 on Coinbase after Bitcoin.

Seeing how DeFi and NFT movements are directly connected to Ethereum, their increased activity was the main driver of ETH prices in 2021, says Moss. “Users need ETH to interact with these technologies, so the more people involved in these communities and protocols, the more ETH’s value increases,” he says.

Where is ETH going?

Former Ark Invest analyst James Wang told Business Insider that ETH could potentially reach $ 40,000. This is the most optimistic call I have heard. Others in the crypto space are seeing it double.

“We expect the price to most likely double from where it is now by the end of 2021 to over $ 8,000 per coin,” says Ivo Grigorov, co-founder and CEO of Credifi, a DeFi lending market based in Sofia, Bulgaria.

Judging by the current momentum in the cryptocurrency space and increased interest in Ethereum, “our price target can easily be exceeded,” Grigorov said in an email correspondence. “More and more investors and developers are new to ETH or turning to the platform in search of a more robust, stable and secure investment vehicle.”

For newcomers to the cryptocurrency market and its “businesses,” Ethereum is a platform where developers can build apps that make it easy to create other alternative coins. An altcoin is basically any cryptocurrency other than Bitcoin, so ETH is an alt.

Ethereum is the name of the underlying blockchain technology or network, while Ether (ETH) is the digital currency that powers the platform. “Ethereum can be described as the ‘open source’ cryptocurrency platform, just like that of Google
GOOG
Play Store or Apple
AAPL
App Store, ”says Grigorov.

Just like in the Bitcoin blockchain, every Ethereum transaction is confirmed when the nodes (participants) on the network come to a mutual consensus that that particular transaction has taken place and they are rewarded in ETH for their work, through a process known as mining. Mining can be easily described as solving / calculating a complex algorithm in order to prove the authenticity of previous transactions on the network.

“As an investor, one of my top cryptocurrencies to buy is definitely ETH,” Grigorov says. “Upgrading to ETH 2.0 is expected to further drive growth and provide significant benefits to investors.”

It’s Ethereum. The Ethereum Network Update, known as the Ethereum Improvement Proposal 1559, introduces a base fee for Ethereum transaction fees, which all users are required to pay when submitting a transaction. This proposal introduces a “burn” which – in layman terms – would “burn” or eliminate the coins, thus reducing the supply.

I won’t claim to understand all computer techniques, but ETH 2.0 is considered a positive network upgrade and therefore good for investors.

“If we’re still optimistic by the end of the year, I’d say ETH would be closer to $ 10,000,” thinks Ioannis Giannaros, co-founder of Wyre, a cross-border payment API using blockchain technology. based in San Francisco. . “If we’re in a bear market, we’ll see lows in the $ 1,400,” he says.

A reversal of fortune

Danial Daychopan, CEO and founder of London-based DeFi company Plutus, said there was a lot of “fear of missing out” when it came to Ethereum. Investor inboxes have been inundated with something that looks like “Ethereum moon” calls all month.

“FOMO has played a big role, but a lot of it is also driven by the smart money rush and by the thousands of developers around the world buying ETH,” he says. “Developers need ETH to pay for the creation of their applications on the Ethereum network. Think of it as a toll fee, where the world’s largest computer charges you tolls for using its immutable cloud servers and verifying every transaction you make on it. ”

The history of crypto investing is the perfect get-rich-quick scheme. These are the specialties for losing weight or gaining muscle diets that never work; it’s the YouTuber who sells you his stock picks from his Ferrari driver’s seat.

But if we assume crypto is a fad, trending at $ 0, the opportunity cost of thinking that way is through the roof. Everyone recognizes him.

If you invested a measly $ 100 in ETH in December 2015, you would have over $ 125,000 today. Only those who believe in flying rainbow unicorns think they will earn 125,000% on ETH again. Also, they would probably sell if it was up 100%. But true believers think they have a 10,000% chance of winning in five years. And why wouldn’t they do it? Look what these pieces have done so far.

If ETH reverses this week, there will be buyers on the other side, thinking about the long game. Unless you think the long term result is the centralization of the Ethereum blockchain, and everything associated with it becomes worthless.

“If you are an investor, know that there are thousands of crypto-losers,” Daychopan says. “Crypto has matured a lot, but it’s still the Wild West of investing. There are coins and even projects that are there just to take your money. Do your own research, invest in the future, but be patient and follow the smart money. The results will be in your favor if you do this. “

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