You Ethereum price: certainly know Bitcoin, but do you know Ethereum, its main rival? It is the second most famous cryptocurrency.
What is Ethereum?
As mentioned above, Ethereum is characterized by the fact that it is not just a currency. It is much more than that. We explain everything about Ethereum below.
The Ethereum project started in 2013 through Vitalik Buterin. This protocol was officially created on July 30, 2015. In addition to Vitalik Buterin, seven other people were involved in the creation of Ethereum including Gavin Wood, Anthony Di Lorio, Charles Hoskinson, Mihai Alisie, and Joseph Lubin.
Ethereum is characterized by its blockchain which houses many DeFi applications. The electronic currency used to operate the Ethereum protocol is called Ether (ETH). The purpose of Ethereum is therefore not only to have electronic money (Ether) to carry out peer-to-peer transactions. The main objective of Ethereum is indeed to create a favorable ecosystem adapted to the needs of DeFi.
How does Ethereum work?
In the words of Gavin Wood, one of the co-founders, Ethereum can be seen as a “common computer for the whole planet”. Indeed, Ethereum is a blockchain designed to develop and launch DeFi applications.
The blockchain programming language is called Solidity. Hosted apps use smart contracts or intelligent contracts to operate without the help of a third-party entity. Thus, operations are carried out quickly, transparently, and with lower costs.
Like most cryptos, mining is an activity essential to the security and operation of Ethereum. Before December 2020, Ethereum used the Proof-Of-Work (POW) algorithm. Similar to that of Bitcoin, miners competed against each other when it was necessary to validate a block of transactions. The winner then won a bet directly in ETH.
With the arrival of Ethereum 2.0, things have changed somewhat when it comes to mining. Indeed, the main change with version 2.0 is the adoption of the Proof-of-Stake (POS) algorithm which requires strong computing power.
We are no longer talking about mining but about staking. If the operation is different, staking performs the same roles as mining. When a stalker deposits ETH on the blockchain to secure it (they play the role of a miner in a way), they receive a reward in ETH (0.00403 ETH per day at the time of writing this guide).
Another peculiarity of the Ethereum blockchain is that it can host other cryptocurrencies. USDT, LINK, or even BNB are some examples of cryptos operating on the Ethereum blockchain and now part of the top 100 crypto
Ethereum price in 2020 to 2023
As with many cryptos, 2020 is special. It was indeed the year that saw the price of Ethereum soar.
Before that, the year had started badly for Ethereum with the arrival of the COVID-19 crisis. Thus, Ethereum did not escape the market crash. In March, Ethereum crashed sharply. While it was €171 on March 12, it rose to €98 the next day.
Like other cryptocurrencies, the price of Ethereum recovers very quickly. In fact, from March, the price begins a long and regular rise which will constitute the longest bull run episode in its history and which will continue at the beginning of the year 2023. 2020 ends with a bang with an Ethereum which is exchanged against €3,237 on December 31, 2021.
Ethereum price in real-time
In 2022, the price of Ethereum keeps breaking records almost every day.
Ethereum Price: Supply and Demand
Ethereum is a cryptocurrency that operates on a decentralized system. This means that transactions in Ethereum do not require the action of a bank or an intermediary to be carried out.
This aspect is fundamental for Ethereum. Indeed, unrelated to the banking system, the price of Ethereum is therefore not impacted by the decisions that are taken at the level of central banks.
Ethereum is mainly impacted by a single parameter, the law of the market. The more demand, the higher the price. However, the balance between supply and demand is never constant. It is constantly evolving. This is why ETH is very volatile.
This feature is not unique to Ethereum as it affects all cryptocurrencies. But Ethereum has an advantage. Which?
As the second crypto in the world in terms of capitalization, Ethereum already enjoys a very large user community. The distribution in Ethereum is therefore more diluted, which smooths the movements of large portfolios.
What Can Affect Ethereum Price?
As mentioned above, the law of the market mainly explains the volatility of Ethereum. Other parameters also play there such as:
The notoriety of Ethereum:
For an asset that essentially depends on the law of supply and demand, notoriety is a very important parameter. Without notoriety, demand is low. However, Ethereum already has a relatively large exposure due to its status as the second crypto in the world.
Additionally, Ethereum was among the cryptos that soared in 2020 and early 2021, which resulted in a very significant media spotlight. However, its notoriety is still far behind that of Bitcoin.
One of the reasons that still limits its notoriety is the difficulty of understanding what Ethereum is. It’s easy to call Bitcoin electronic money. For Ethereum, this is more complex. Indeed, as explained below, Ethereum is more of a platform or protocol than just electronic money.
The uncertainty of the economic situation is an ideal breeding ground for the explosion of cryptos like that of Ethereum. To take full advantage of this situation, Ethereum will have to gain in readability and clarity for a public still unfamiliar with blockchain and DeFi.
Ethereum prices and legal and tax regulations:
Ethereum, like most other cryptocurrencies, comes with a risk associated with its success. Indeed, following the explosion of cryptos, many governments are starting to take a closer look at this area. Concretely, this means that many countries are studying the question of affixing a regulatory framework to the use of cryptos. These regulations would have an undeniable effect on the price of crypto futures.
However, at present, it is still difficult to know the direction that will be taken in terms of regulation. The primary advantage of cryptocurrency is its decentralized nature, strict and coercive regulations would hurt investors.
That said, the establishment of a regulatory framework is not necessarily to be viewed with suspicion. Well-defined regulations can help reassure some investors. Indeed, this would give some guarantees and protections against thefts and scams unfortunately still very widespread in cryptocurrency.
What Future of the Ethereum Price?
ETH is very volatile. Being directly linked to the law of supply and demand, it is very complicated to make projections. The history of cryptocurrencies has thus shown that one must be careful with predictions.
However, Ethereum is beginning to be well known to specialists and the issues are increasingly clear. Some specialists are taking a close look at Ethereum and providing some opinions on the price of Ethereum in 2022 and 2023.
Prediction on the price of Ethereum in 2023:
In 2023, specialists do not foresee a drop in the price of Ethereum.
- The most optimistic, traders from the Italian site Previsioni Bitcoin, foresee a significant rise in Ethereum in 2023 with a price of around $5,800 ( € 4,768 ).
Ethereum price forecast in 2022:
As in 2021, specialists do not envisage a drop in the price of Ethereum in 2022.
- Some foresee a price that would stagnate around $1,500 ( € 1,233 ).
- Others are looking for a significant increase with a long-term goal of around $9,000.
- Brian Schuster, a creation of Ark Capital, sees ETH at $ 100,000 (€82,216) by 2024. If this bull run were to take place, there is no doubt that the price of Ethereum in 2022 should therefore be on the rise.
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Ethereum price in 2023: Too late to invest?
Ethereum is one of the cryptocurrencies that has experienced a very significant increase. Therefore, the question is whether there is still time to invest in Ethereum, the answer is yes! As explained above, ETH is certainly on the rise, but it hasn’t really exploded yet.
Indeed, with uncertain economic conditions, the explosion of DeFI, and the launch of Ethereum 2.0, the conditions are in place for the price of ETH to continue to rise.
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The important points about ETH that you need to take into account:
- Ethereum is the second cryptocurrency in the world behind Bitcoin in terms of capitalization.
- Its community is very dynamic and important.
- Version 2.0 of Ethereum was finally successfully launched in December 2020. More suited to the challenges of DeFi, Ethereum 2.0 should establish itself as the ecosystem of finance 2.0!
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