Should I invest in Ethereum in 2024?

Ethereum is silver to Bitcoin’s gold, and as the second largest cryptocurrency, it accounts for 19% of all crypto market cap. While Ethereum’s price has been holding relatively steady at just under 4,000 USD, you might be asking yourself: Is now a good time to buy Ethereum? Well, you’re not alone. Let’s have a look at potential Ethereum price prediction. See where we think the path will end for Ethereum in 2024.

After a catastrophic 2022, the crypto market looks more appealing now. The largest altcoin, Ethereum, is one of the most solid performers in the early 2024 crypto market, being about 58% up from the start of the year.  Ethereum is not only a very innovative technology in terms of smart contracts, but it is also a fantastic investment. It is less likely to crash and burn than smaller altcoins. Still, it has the ability to skyrocket and net investors’ stratospheric returns. In the last bull run, Ethereum (ETH) made a whopping 40x at its peak. Crypto Twitter (it still feels weird to call it »X,« so we’ll stick to good old Twitter) is again full of Ethereum bulls making claims that the price of Ethereum will only gain traction in 2024. Should you trust them? Here is what you need to know.

Ethereum leads the crypto market

One significant advantage of Ethereum is that it continues to dominate nearly every blockchain and cryptocurrency sector. From NFTs to decentralized finance (DeFi), the metaverse, and Web3. This is primarily a result of Ethereum’s first-mover advantage because, despite the entry of numerous new competitors, Ethereum, in 2024, has continued to lead the market with breakthroughs like smart contracts. Simply put, Ethereum was the first one to join the party.

Consider the NFT market, for instance. With ground-breaking collections like the Bored Ape Yacht Club and the CryptoPunks, which are still among the most expensive NFT collections in the world, Ethereum was the one responsible for the NFT explosion. The Ethereum blockchain hosts all 25 of the top NFT collections. And even though the launch of Ordinals has given Bitcoin some recent success, Ethereum is still the leading blockchain in terms of the amount of NFT sales. That’s precisely what investors are looking for in a long-term investment. A top-tier cryptocurrency with a pronounced competitive advantage and a significant market share advantage.

Is Ethereum deflationary?

And what does that mean? In contrast to “inflationary” currencies, which see their supply increase over time, “deflationary” currencies experience a gradual decline in supply. Notably, proponents of cryptocurrencies are drawn to deflationary currencies because they think scarcity will raise their possessions’ value. Since the supply of some cryptocurrencies is dwindling over time, if demand remains constant, their value will increase. For example, Binance Coin (BNB) burns tokens quarterly to control the supply and guarantee a maximum of 200,000 coins. However, because of burning events, there are fewer BNBs available in circulation right now.

Ethereum technical upgrades

It is also a crucial aspect of price prediction. Apart from The Merge, Ethereum saw some significant improvements recently. Ethereum finished the Shapella upgrade in April 2023, significantly increasing its appeal for crypto staking. Ethereum in 2024 will see the arrival of the next significant improvement, provisionally dubbed Dencun. This update will increase Ethereum’s storage capacity, scalability, and effectiveness. The Ethereum blockchain now aims to handle 100,000 transactions per second, significantly more than any of its main rivals can.

Ethereum price history

To help you understand the fluctuations in the value of Ethereum, let’s take a look at the Ethereum price history:

• 2015: Ethereum launches as an Initial Coin Offering (ICO). Early investors were lucky as the introductory price was $0.30 per coin. By the end of 2015, ETH had climbed to around $0.90, marking a threefold increase in six months.
• 2016: ETH was worth less than $1 at the beginning of the year. But then the price rose sharply, reaching $18 in March of that year. Then things worsened when hackers stole $46 million worth of Ether in an attack. Ethereum lost almost a third of its value, ending the year at $8.
• 2017: Fueled by the ICO craze, where Ethereum was the primary platform, ETH started 2017 at around $8 and reached $40 by March. The latter half of 2017 saw a crypto bull run, with ETH reaching an all-time high of over $1,400 in January 2018.
• 2018: Following the euphoria of 2017, the crypto market entered a bear phase in 2018. Ethereum wasn’t spared, dropping its price to around $85 by December.
• 2019: ETH started the year at around $140 and saw steady growth, ending 2019 at approximately $130.
• 2020: The rise of Decentralized Finance (DeFi) on the Ethereum platform reignited interest in ETH. Prices surged from around $130 in January to over $700 by year-end.
• 2021: 2021 was a landmark year for Ethereum, with prices reaching new all-time highs. ETH crossed the $4,000 mark in May. The transition to Ethereum 2.0 and the move to Proof of Stake generated significant buzz.
• 2022: The bear market started, and Ethereum, along with other cryptocurrencies, dropped a significant percentage, touching $1,200. 
• 2023: After the crypto catastrophic 2022, Ethereum showed some healthy and steady recovery, ending 2023 at a constant $2,400.

How will ETH perform in 2024?

The bullish scenario

Even for the moderate bulls, the price of Ethereum may remain steady in 2024, but it will probably turn bullish in the second part of 2024. One such reason is the “MEV-burn” plan. This bullish catalyst is similar to EIP-1559, which implemented a fee burn and significantly impacted Ethereum’s value. If MEV-burn is approved, rewards for Miner Extractable Value (MEV) would be burned rather than distributed to validators. At its core, MEV represents the total value miners can extract (or profit from) by reordering, including, or excluding transactions within the blocks they produce. It is a hidden treasure trove that miners can tap into beyond the standard block rewards and transaction fees. Although there has yet to be a precise date, it’s feasible that this will start to happen in 2024.

ETH staking is a promising indicator: Similar to how interest rates in the real world are viewed as the benchmark of yield for investors, the return on staked ETH is gradually developing into a basic amount of yield in the cryptocurrency markets. This yield, currently hovering about 5% annually, offers chances for new financial primitives to be developed using Ethereum’s staking mechanism. Finally, the burning feature of Ethereum that was added in The Merge upgrade is still in use and works to decrease the total amount of Ethereum.

Layer 2 summer

This means multiple layer-2 projects might get significant attention, such as Arbitrum (ARB), Optimism (OP), Polygon (MATIC), Loopring (LRC)… The reason for this is in the innovative applications being created and released on layer 2 projects. Thanks to Ethereum’s security, financial solutions that were previously impossible to launch can now be done quickly and cheaply.

Another potential driver of an optimistic scenario is the growing usage of Ethereum as collateral. Many new DeFi protocols are now coming online that will use Ethereum in this way. This involves increasing integration with real-world assets, additional varieties of stablecoins, and Automated Market Makers (AMMs).

Bearish scenario

According to many crypto analytics, a bearish situation for Ethereum in 2024 is less likely given the promising future developments. Such scenario would probably be connected to more general market conditions or heightened regulatory scrutiny. A shock to the macro environment or a strengthening of the regulatory pressure we’ve already seen on crypto would be more the bear case for the entire cryptocurrency market.

In the long term, though, some potential growth suppression factors exist. If we think about a bear case for Ethereum over the next 5-10 years, it would be Ethereum failing to continue growing, its product-market fit turning out to be just a niche and being hampered by legislation, particularly at the ports of entry. This might entail stricter control over fiat on/off ramps, application frontends, or more rigorous control over stablecoins.

Ethereum price prediction 2025

By 2025, the market will have had ample time to adjust to Ethereum 2.0. If the transition proves successful and the platform sees increased adoption, Ethereum’s price could stabilize around the $7,500 mark, with the potential to reach highs of $15,000 at a potential bull run top. As global regulatory frameworks for cryptocurrencies become more precise and more defined, institutional investment in Ethereum might increase, potentially boosting its price. On a more bearish note – while Ethereum holds a dominant position, competitors like Cardano and Polkadot are just a little behind. Ethereum’s ability to innovate and stay ahead of the curve will be crucial. If it manages to do so, the price could see an upward trajectory. Otherwise, it might face resistance.

Ethereum price prediction 2026

After the Ethereum 2.0 transition, the platform might introduce upgrades to enhance scalability, security, and sustainability. These technological advancements could further cement Ethereum’s position as the leading smart contract platform, potentially driving its price upwards. The next crypto bull run might finish in 2026. Still, if Ethereum continues to dominate the DeFi and NFT sectors, its price will stabilize around the $10,000 mark, with potential peaks reaching up to $15,000 or more, depending on market sentiment.

That leaves us just one question…

Is now a good time to invest in Ethereum?

We are not financial advisors, but the landscape might favor investing in Ethereum (ETH). Here is why:

1.Ethereum aims to become a decentralized world computer

Ethereum’s vision of becoming a “world computer” is not just a catchy phrase. It’s a paradigm shift in how we perceive and use blockchain technology. By providing a platform where developers can build decentralized applications (dApps), Ethereum is paving the way for a future where centralized servers may become obsolete and the power is returned to the hands of the users.

2.Rise of DeFi

Ethereum is at the heart of the DeFi movement, which aims to recreate traditional financial systems (like loans and interest) in a decentralized manner, free from intermediaries. The exponential growth of DeFi platforms, most of which are built on Ethereum, showcases the platform’s potential to redefine finance for the digital age.

3.Ethereum is a haven for uncensorable apps

In an age where data privacy and censorship have become hot-button issues, Ethereum offers a breath of fresh air. Its decentralized nature ensures that applications built on its platform resist censorship. No single entity, government, or corporation can shut down a dApp or control its operations. This uncensorable nature of Ethereum is not just a boon for developers but also for users who value their digital rights. From social media platforms to financial services, the applications are limitless, and the promise of a free and open internet is closer than ever.

4.Ethereum staking

2023 has been a landmark year for Ethereum, especially with the full transition to Ethereum 2.0 and the introduction of staking. Gone are the days of energy-intensive proof-of-work (PoW); Ethereum now operates on a proof-of-stake (PoS) mechanism. This means that by simply holding and “staking” your Ethereum, you can actively participate in the network’s security and earn rewards in return. Staking has made Ethereum more eco-friendly and offers a lucrative opportunity for long-term investors. With the potential for steady returns and the added benefit of supporting the network, staking might just be the cherry on top for potential Ethereum investors.

Conclusion

The price dynamics of Ethereum have been influenced by a myriad of factors, from technological advancements to broader market sentiments. As we approach the second quarter of 2024, specific price predictions for Ethereum have been a focal point of discussion among analysts. Forecasts suggest that Ethereum could potentially reach the $8,500 mark by mid-2024, with some optimistic projections even touching $10,000, given its current momentum and the anticipated developments in the Ethereum 2.0 upgrade. However, it’s essential to note that these predictions are based on current data and trends, and the volatile nature of the cryptocurrency market can lead to unforeseen fluctuations.

For potential investors, it’s crucial to approach Ethereum not just as a speculative asset but as a representation of a broader movement towards decentralized finance and applications. While its price performance is undoubtedly impressive, it’s the underlying value proposition of Ethereum that makes it a noteworthy consideration for portfolios. As always, thorough research, risk assessment, and consultation with financial advisors are paramount before making any investment decisions.

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