Ethereum ($ETH) has been enjoying a trade in the green for the past few weeks. It has also managed to maintain its price level above $2k for the majority part of the last 30 days.
$ETH’s recent bullish action seems to be triggered by JPMorgan’s comments on the altcoin, with its analysts banking on it and hoping it to rise above Bitcoin ($BTC) in 2024. This was revealed in a published note on Wednesday crafted by a team of analysts headed by Nikolaos Panigirtzoglou.
What is Ethereum?
After launching in 2015 by Vitalik Buterin and various other co-founders, Ethereum has emerged as a key player in the cryptocurrency market. Ethereum quickly distinguished itself from its predecessors. Unlike Bitcoin, which was primarily seen as a store of value, Ethereum was designed with utility at its core. Developers were able to create applications and their own layer 2 networks by using the Ethereum blockchain.
Ethereum was initially founded with the proof of work (POW) model, which meant cryptocurrency miners created new blocks on the network. However, in 2022, it moved to a proof of stake model (POS), where new blocks are created by validators staking the native cryptocurrency.
How Ethereum changed the crypto landscape
Ethereum’s introduction of smart contracts was a game-changer in the cryptocurrency world. These contracts execute automatically when certain conditions are met, without the need for intermediaries. This innovation paved the way for decentralised applications (dApps), including decentralised finance (DeFi) and non-fungible tokens (NFTs), expanding the use of blockchain technology beyond simple monetary transactions.
When it comes to DeFi, it is the largest chain, according to DeFiLlama. At the time of writing, there are $26.1billion worth of assets locked into applications on the blockchain, making up roughly 55% of the entire DeFi market.
The top three protocols on Ethereum in order of total value locked (TVL) are the staking app Lido, the decentralised autonomous organisation (DAO) platform Maker, and the lending protocol Aave.
Ethereum also pioneered the concept of tokens, giving developers a much easier route to launch their own cryptocurrency. Developers are able to utilise the ERC-20 standard to create their token. Some of the biggest ERC-20 tokens include Chainlink and Polygon.
The ETH cryptocurrency
Meanwhile, the blockchain’s native cryptocurrency Ether has become a significant asset in the cryptocurrency market. It’s a popular choice for investors, second only to Bitcoin in terms of market capitalisation.
It is not just a medium of exchange. It’s a utility token that powers the Ethereum network, used as a currency for transaction fees called gas. This fee is then paid to validators to incentivise them to continue securing the network.
Ethereum price history.
As the second largest cryptocurrency, Ethereum’s price is often indicative of the wider market. ETH usually takes price hits during market crashes, while making gains during bull runs.
The cryptocurrency started off via an Initial Coin Offering in 2014, where it raised $18.3m worth of Bitcoin. Over 60 million Ether sold at a price of $0.311 per cryptocurrency.
ETH then launched in August 2015, going live at $2.79, according to CoinMarketCap. It made steady gains over its first couple of years of trading, climbing to the $10 mark by the beginning of 2017.
The bull run of 2018 saw the cryptocurrency reach its first significant price record of $1,365 on 15 January.
Despite some peaks and troughs, Ether settled between the $100 and $300 mark over the following years.
It next saw huge success in 2021 with the wider market. It rocketed back to the $1,300 level at the end of January and continued its upward trajectory across the year. It hit $3,924 on 10 May.
Ethereum then climbed to its all-time high of $4,891 on 16 November 2021.
Like most cryptocurrencies, it couldn’t keep up the 2021 highs and felt the impact of the crypto winter that followed.
During the crypto crash of June 2022, it dropped back to the $1,000 level. Despite moving to a POS model later that year, it struggled to see much price action.
More recently, it has started to make gains as the wider market picked itself back up recently. As of 14 December 2023, it was changing hands for $2,281, up by almost 5% over the last day.
Its main rival Bitcoin, on the other hand, was only up by 4% and was noted trading in the red as well, as it went down by over 1% weekly. Nevertheless, it continued to maintain dominance in the broader cryptocurrency market, trading at $42,838 as of press time.
What does JPMorgan say?
The banking behemoth’s analysts are of the conviction that Ethereum would “re-assert itself and recapture market share within the crypto ecosystem” in the coming year. In doing so, it is expected to outperform its counterparts, including Bitcoin.
The main catalyst behind Ethereum’s resurgence would be its upcoming EIP-4844 upgrade, popularly known as Protodanksharding. Scheduled for the first half of 2024, it is a preliminary step towards the full implementation of Danksharding.
Danksharding is an Ethereum rollup scaling method where transactional throughput is increased by providing extra storage space for rollup transactions. It is a way around the long procedure of dividing Ethereum into several shard chains, as opposed to the initially intended sharding method.
One of the several protocol upgrades required to get there is proto-danksharding, which is a way for rollups to add cheaper data to blocks. It will introduce a new transaction type known as a blob-carrying transaction. It comes with an added component, which is a large piece of data called a blob.
Approximately about 125 kB, these data blobs would offer a more cost-effective solution than similar amounts of calldata. However, these are not permanently stored or accessible by the Ethereum Virtual Machine (EVM).
The upgrade’s benefits would also extend to Layer 2 networks like Arbitrum and Optimism. The additional temporary data space would boost the network throughput and lower transaction fees on these chains, enhancing their overall efficiency.
Analysts expect this to trigger a rise in $ETH’s demand where the cryptocurrency-related trends would only grow further.
Ethereum price prediction
JPMorgan’s bullish price prediction for Ethereum is supported by a similar stance taken by Standard Chartered in their recent optimistic forecast.
In this, SCB’s analysts had predicted that Ether might experience a 400% surge within a few years, followed by a more sustained upward movement towards $35,000.
This meant that by the end of 2026, Ether could reach up to $8,000 in this predicted jump from today’s prices.
The head of FX Research, West, and Digital Assets Research, Geoff Kendrick, wrote on the same saying: “We think the path higher for $ETH prices may take longer than for $BTC, but we see $ETH eventually reaching a higher price multiple than $BTC relative to current levels (5.0x versus 3.5x).”
These forecasts mostly stem from the upcoming improvements to the Ethereum blockchain.
On the other hand, Ethereum is forecasted to reach an average price of $4,875.28 by the end of 2025 as per PricePrediction. It expects a bullish trend for the altcoin in 2030, with prices potentially reaching $38,638.06 mark.
At the time of press, Ethereum’s charts illustrated bullish sentiments. The Moving Average line (MA), an indicator that determines the trend for a coin, was seen below the candlesticks at press time. It was angled up, meaning that the price is in an uptrend.
The Moving Average Convergence/Divergence (MACD) also seemed to go through a bullish crossover of lines on the chart, after which green histograms were seen for $ETH.
The Awesome Oscillator (AO) emanated green bars. However, they were yet to make a move above the zero line. Price volatility could also be on the low as the Bollinger Bands were seen coming closer together.
Should I invest in Ethereum?
Ethereum price predictions are fairly positive as of writing with multiple leading banks anticipating a strong bullish action in future. However, the cryptocurrency is also known for experiencing high rates of volatility and you should never invest more than you can afford to lose.
Is Ethereum a good investment?
Ethereum is the second largest cryptocurrency and was designed with utility in mind. It can be used to pay for transaction fees for the bustling crypto network. Investors should be cautious and always conduct thorough due diligence.
Disclaimer: The information provided in this article is for informational and educational purposes only and should not be construed as financial advice. CoinNews and its authors are not financial advisors or experts. We recommend that you consult a professional financial advisor or conduct thorough research before making any investment decisions. Cryptocurrency investments carry a high degree of risk, and you should only invest an amount you are willing to lose. The opinions expressed in this article are those of the author and do not necessarily reflect the views of CoinNews or its affiliates.