There are some cryptocurrency analysts predicting that by 2022 Ethereum analysis will probably beat Bitcoin. Ethereum cryptocurrency is the second most valuable cryptocurrency in the world. Ether is already hitting all-time highs ahead of a massive upgrade from its base platform, Ethereum.
Ether’s current market capitalization is worth just under $500 billion. That’s still slightly less than half of the largest cryptocurrency, Bitcoin, which stands at less than $1 trillion.
Even though it is still half the market cap compared to Bitcoin, why do some analysts believe Ethereum can beat Bitcoin and become the first?
Will Ethereum will go up or down?
Ethereum and Bitcoin have formed an all-time high in November 2021, but Bitcoin has fallen more than Ethereum.
First, it is important to understand the difference between Bitcoin and Ethereum. Bitcoin is a system that allows people to send money to each other without the need for a bank as an intermediary. Bitcoin uses a technology known as blockchains, which are online ledgers whose transactions are checked and recorded by a decentralized network of computers known as validators.
The validators are rewarded for their work by receiving freshly minted bitcoins as a reward. The process is called “mining”. Interestingly is that bitcoin is relatively rare as there are only about 18 million coins and the protocol is such that there will never be more than 21 million.
On other hand, Ethereum also works just like Bitcoin. But there are fundamental differences between both. Ethereum is a worldwide hostless software platform, on which developers build thousands of blockchain-based applications.
Ethereum uses a smart contract
The Ethereum core of the platform is using “smart contracts”. Its means are automated agreements that ensure that money and assets transfer from hands when certain conditions are met. Ultimately, all transactions on the platform use Ether and the success of the platform is why Ether has become the second-largest cryptocurrency after bitcoin over the past few years. The fact that Ether drives the platform is even referred to as “gas fees” giving it a utility and intrinsic value that bitcoin does not.
Currently, the growth of applications running on the Ethereum platform is massive, but it will be a new challenge for Ethereum. With more and more applications running on the Ethereum platform, it will reduce the speed of gas fees that control transactions on the network.
Therefore, a new competitor has emerged which is also a platform where application developers can use their blockchain to be creative. Polkadot, Solana, Avalanche are competitors that might hinder Ethereum’s growth.
How high can Ethereum go in 2022?
In 2021 there will be positive news that supports the strengthening of the crypto market. Some of them are the widespread adoption of Bitcoin, the emergence of Bitcoin mutual fund companies in the US, to the presence of the Ethereum London Hard Fork event.
The London Hard Fork is one of the events that crypto-asset activists look forward to. This update in the Ethereum blockchain network is considered to provide significant changes, especially in terms of efficiency.
The progress is believed to be bringing Ethereum to its latest price point. The Longforecast page has a prediction that Ethereum will reach US$5,670 by the end of 2021.
The Ethereum London Hard Fork is projected to strengthen the ecosystem on the Ethereum blockchain. Besides that, it will also finalize various features in it, such as smart contracts, decentralized finance (DeFi), decentralized apps (dApps), to NFT.
This update also causes Ethereum to go into deflation by limiting the maximum supply so prices go higher. The update also makes online transaction fees (gas fees) more predictable and less volatile.
High price volatility in 2021 means Ether adoption is increasing in demand and trading. The highest price in 2021 is $4,891.70, with a possible increase in demand in 2022 allowing the price of Ethereum to go above $5,000.
Ethereum fundamental analysis
One very fundamental piece of news for Ethereum in 2021 is a continuous update to Ethereum 2.0 which could be a very important moment in the history of the Ethereum blockchain.
It will become And the most fundamentally important thing for Ethereum. Because will latest release in the form of Beacon Chain. Despite facing transition challenges, the Beacon Chain is one of the last steps to transform Ethereum from Proof-of-Work to Proof-of-Stake.
Ethereum’s roadmap for 2022 includes merging proof of work into one proof of stake. Fundamentally this process of merging Ethereum 2.0 will be and the final step that will truly turn Ethereum into a Proof-of-Stake network.
The merger process will merge the current Ethereum Mainnet with the Beacon Chain. That will leave the old method of proof of work to be completely proof of stake.
However, there is one major feature that will not be available after the Merger which is the ability to withdraw the staked ETH. Small investors may find it difficult to hold ETH locked for an indefinite period and cannot make withdrawals when needed. This is not a big deal for long-term holders and former Proof-of-Work entities.
Besides the Ethereum 2.0 transition, another momentum that could affect Ethereum in 2022 is the development of Web3 applications that are expected to drive Ethereum adoption. In 2021 Web3 has become hype and allows growth momentum to occur in 2022.
Ethereum coin analysis
Ethereum’s current circulating supply is 118,890,087.69 ETH with a total supply of 118,891,226, already close to 100%, citing Coinmarketcap data. According to the news, there will be a limit on the number of tokens after the merge process on Eth2 is complete, but the exact number has not been confirmed yet.
For a validator to participate in stakes, he or she must lock in at least 32 ETH, which is the minimum requirement for a validator.
If a shortage of tokens occurs and demand increases, it will automatically increase the price. It is estimated that in 2022 there will be competition between Ethereum and other blockchains which are often referred to as the Ethereum Killer, such as Solana, Polkadot, Cardano.
Ethereum network analysis
If Ethereum is fully proof-of-stake by 2022, it will likely lower the cost of gas that has been criticized on the Ethereum blockchain.
Yen Wen Feng, founder of Perpetual Protocol believes that once Ethereum transitions to Proof of Stake it will lower transaction costs and will strengthen Ethereum’s position as a destination for using DeFi applications.
On the Ethereum network, Layer 1 refers to the Ethereum network itself. While Layer 2 refers to any blockchain that is built on top of the underlying blockchain. The main purpose is to make transactions faster and cheaper.
Later on, 2022 will become the year that Layer 2 chains built on top of Ethereum will achieve critical mass adoption. Layer 2 will surpass Layer 1, both in terms of total locked value (TVL) and volume.
Ethereum network adoption is also expected to come from play to earn games. In 2021, the trend of trading crypto assets from play-to-earn games has started. In the next year, several companies are expected to continue to grow in 2022. One of the crypto-based play-to-earn games is sometimes called GameFi.
Ethereum risk analysis
Even though some analysts predict the price of Ethereum in 2022 will rise. But it doesn’t mean the predictions will come true. On another side, there are risks that also lurk in the value of Ethereum.
First, the market risk arising from price volatility allows one to get a lower value than when he bought because of the volatility risk. Second, the risk of hacker vulnerability would allow Ether owners to lose their funds due to a hacked account.
Another possible risk is that during the transition to Ethereum 2.0, which will fully use proof of stake consensus, it may allow processing errors that cause network bugs.
Ethereum technical analysis
Ethereum’s daily volume towards the end of 2021 was USD$11 billion, today down 11.88%. Meanwhile, the current price was $4,081.50 it is up 0.41% from the previous day.
If you look at the price trend that occurs in Ethereum against USD, it tends to form a sideways market. The prices are possible to often go back and forth on the 9 periods Moving Average line.
Seeing at the 1-hour time frame, the price of Ethereum formed a sideways pattern. Where the price movement experienced a decrease in volatility marked by a squeezed Bollinger band.
Here the upper band is still solid enough to become resistant. As well as the lower band is still strong as a support line.
However, we see a weak ascending pattern from the moving average signal. That is heading up and the price is above the MA line. Meanwhile reading the RSI indicator, the current level of 53 indicates an uptrend in the short term.
The conclusion from the analysis based on the indicators used is that buy signals get a higher portion than sell signals. However, the indicator signals are not always correct. So when trading on margin, it is possible to set the risk in anticipation.
Ethereum analysis prediction
2022 could be a ticking time bomb for the price of Ethereum. As this year there will be a transition for Eth2. Where there will be a merger of proof-of-work consensus into fully proof of stake. Several forecasting sites predict the future price of Ethereum.
- Wallet Investors project Ethereum is a good investment. Prediction the price in 2022 hit USD$6989,150, and predictions in 2026 are USD$19298.10.
- The forecasting site Longforecast even predicts the price of Ethereum will radically reach USD$8969 in 2022. And in the long term early 2025 it will reach USD$15044.
- Digitcalcoinprice, this forecasting site predicts the price of Ethereum will increase gradually but will drop in 2025. And in 2028 the highest price of Ethereum is USD$17,615.29.
- CryptonewsZ predicts the price of Ethereum will increase from year to year. With the price, the climax will occur in 2025 to $10,300.
Even though Ethereum will face challenges from its competitors such as Cardano, Solana, or Polkadot. There are still many who believe that the Ethereum blockchain is the place where Defi and Dapps. The platform developers still put their trust in the Ethereum blockchain.
And also in some countries that have been trying to make regulations on cryptocurrencies. It can be good news for Ethereum too. Because with this regulation. It will be more obvious to separate cryptocurrencies from fiat currencies.
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