Ethereum is the third largest digital currency with a market capitalization of $11.2 billion. It brought about the second generation of blockchains, introducing smart contracts and the concept of decentralized applications, ICOs and more. Ethereum has seen massive highs followed by disappointing lows and the continued downturn in prices is surprising both investors and users.
Ethereum Price Movement and More
On February 4, each Ether sells for $107.68. At its peak, Ethereum was selling for $1,377.72 at the market cap of $133.5 billion. The last time Ethereum was selling for around $100 price was in the first half of 2017.
However, there is more to Ethereum than just the price movement. It’s transaction volume peaked at $35 billion in January 2018, but since then, it has come down to $160+ million. While EOS and Tron, two of its rival platforms are far below in terms of price, they are quickly catching up on the daily transaction volume. Interesting, only one decentralized application running on Ethereum made it to the top 50 of Dapp Radar’s app rankings and that too on no. 47.
EOS is leading the transaction count charts, followed by Tron and Ethereum. However, the transaction value on Ethereum is still higher. The good news is that Ethereum network’s average fee is going down.
Ethereum’s Big Problem
The biggest problem with Ethereum’s ecosystem is scalability. The Constantinople hard fork, which was expected to arrive in January this year has also been delayed which means that scalability issues will continue for some time. While EOS and Tron dominate the dApp market as they are more scalable chains.
It’s not that bad for Ethereum. It is planning to move from Proof of Work (PoW) to Proof of Stake (PoS) consensus algorithm. It will also be introducing sharding and off-chain transactions to scale the network better and improve its efficiency.
Price Predictions for ETH
Although there is significant leverage for Ethereum to develop and scale its ecosystem and stay ahead of its competitors, the price data doesn’t adequately support the coin. It is a victim of the crypto winter, and the phenomenon is expected to take its toll on the currency this year as well.
If nothing else changes and no big events or developments are announced, then Ethereum will continue its downward movement. The next two months will be specifically hard for the currency as it is expected to lose over 2/3rd of its value and trade between $30-32, a price range which will be difficult for the coin to break away from. In fact, by December 31, 2019, the price could be $30.097.
Some upward movement is expected In the first half of 2020, going up to $35 but by the end of 2020, the price will plummet again to $30.520. The coin will continue testing its resistant at $35-$36 in 2021 before settling at $34.112 by the end of the year.
Overall, Ethereum is a bad investment for the short term if you buy today. Waiting for another 2 months could help you get in a decent price levels which could translate into moderate gains within 1 to 3 years. Holding the decision to buy for another 1 year wouldn’t make a difference.