ETHEREUM AT $20,000
Individuals wonder if Ethereum can rise to a significant price, if $20,000 is possible for Ethereum in the long term and if the price may even go higher. If it is possible for Ethereum to go insanely high, what catalyst do we need to attain such prices?
There are several reasons why Ethereum might hit these instance prices that analysts have been predicting lately, mostly the $20,000 prediction.
The primary reason is, Institutional Buys. Institutions will start entering laboriously into Ethereum as we start seeing more social proofing for Ethereum. It becomes safer for institutions to enter Ethereum the same way it happened to Bitcoin. Institutions will purchase Ethereum; it is only a matter of time. They will be buying the premier internet bond in a revolutionary tech stock packaged as a completely new asset class.
The reason why institutions are not scrambling into Ethereum is that they have not yet understood the value proposition of this unique asset. Ethereum acts as an index fund for the entire Ethereum ecosystem; Uniswap, Synthetix, Aave, and all those big DeFi applications, Tokenized commodities, Stablecoins, and NFTs are present on the Ethereum ecosystem.
The more success those niches have, the more success Ethereum will have because you will need Ethereum to use any of those different niches.
Investing in Ethereum is also like investing in a high-tech stock, just that it is one that will revolutionize all markets (stock market, bond market, etc.)
Ethereum staking rewards are unique value propositions for Ethereum; no stocks pay out more of themselves. The more Ethereum you hold, the more Ethereum you can get.
Ethereum 2.0 is going to realign the economic incentives for Ethereum ultimately. In Ethereum 1.0, minors always have to see their cryptocurrencies before they can buy their bills. They are still selling ETH, thereby creating a constant selling pressure for Ethereum. Whereby staking will encourage hoarding of ETH, most of the supply will be locked away, leading to more scarcity on exchanges, and the price will go up long term.
The Ethereum upgrade, EIP1559, will introduce fee burning to Ethereum; it will make Ethereum a Deflationary Asset. This upgrade is expected to happen in the next few months but possibly before the start of 2022.
This will be programmed straight into the protocol and going to shake up the economics of Ethereum thoroughly. With these massive economic forces coming into Ethereum, staking, fee burning, we will see these crazy price valuations of $20,000 or beyond. These are not overnight price catalysts, though; it will take a while before these things come into fruition before institutions begin to parade into Ethereum.
