Fundstrat strategist David Grider has revelated he believes the price of Ethereum’s ether, the second-largest cryptocurrency by market capitalization, could climb more than sevenfold to a new high at $10,500.
Grider’s prediction is based on the popularity of the Ethereum blockchain and on the growing popularity of decentralized finance (DeFi) applications. Ethereum’s developers are also making progress toward the launch of Ethereum 2.0, which is expected to help the network scale to handle a much larger number of transactions per second.
Per Grider, Ethereum is “the best risk/reward investment play in crypto,” as “blockchain computing may be the future of the cloud.” Potential risks for investing in ETH, he said, include setback for the network’s ETH 2.0 upgrade, or a cryptocurrency bear market.
Ethereum 2.0’s Phase0 was launched in December 2020 when the so-called Beacon Chain was launched. The Beacon Chain is a Proof-of-Stake (PoS) blockchain, and it signals the first step in the plan to change Ethereum’s consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake.
It runs alongside the original Ethereum PoW chain, making sure that there is no break in the continuity of the chains. The chain helps manage the PoS mechanism, process crosslinks, and “direct consensus and finality.” Phase 1 is expected to be launched this year and will “address finality and consensus on shard chains.”
The decentralized finance space has grown exponentially over the last few months and now has over $23 billion worth of cryptoassets locked in it. On protocols like Aave, Compound, Uniswap, and Curve users can earn interest on their crypto holdings or take out crypto-backed loans.
The price of ether has risen over the last few weeks to hit a new all-time high above $1,430, according to analysts, thanks to increasing demand from those using decentralized applications such as those in the DeFi space, and thanks to the ETH locked into the Ethereum 2.0 staking contract, which is effectively out of circulation until the network launches.
Grider isn’t the only analyst bullish on Ethereum. Former Goldman Sachs executive Raoul Pal has revealed he believes the price of ETH, the second-largest cryptocurrency by market capitalization, could go to $20,000 “this cycle,” based on Metcalfe’s Law.
Raoul Pal said on social media that it’s “all Metcalfe´s Law,” and that “ETH = BTC” whether investors like it or not. He started pointing towards a model his team created to demonstrate Metcalfe’s Law on the BTC network using active addresses and the cryptocurrency’s price, as well as market capitalization.
Featured image via Unsplash.
