ETH Price Breaks ATH Again, How Far Can It Climb?
ETH price finally catches up with fundamental growth but it's not over yet...
2020 was the year to reflect on the fundamental value of Ethereum. If anyone followed me during this time they would have read my predictions for a 2017-style bull run that would be led by decentralized finance (DeFi), eclipsing the ICO craze and being sent into overdrive by “decentralized autonomous organizations”. Not only did DeFi attract huge sums of money to Ethereum and kickstart phenomenal price growth for not just ETH but many DeFi assets, fundamental metrics like transaction fees, active addresses and stablecoin transfers were also going parabolic.
I ended up spending most of 2020 complaining about how the incredible growth of DeFi and Ethereum’s fundamentals were still not being reflected in the price of ETH. Ethereum was consistently driving more demand for block space and settling more value than Bitcoin, yet its price was flat.
So now, as we witness a second all time high for the price of Ethereum in a month, I don’t have a lot more to say that hasn’t already been said this past year. The rally we’re experiencing was largely predictable, particularly after Bitcoin led the way in breaking its own all time high in December 2020. What is less certain, however, is how far this run might go.
While I have no particular price target, I think it is very possible that we see $5,000 ETH in the next 12 months, putting Ethereum’s market cap at roughly the same as what Bitcoin’s is today (and who knows, Bitcoin may well break $1 trillion this cycle). In the longer term - and perhaps in a bull run of the future - I anticipate that Ethereum will flip Bitcoin’s market cap, at which point the price of ETH is anyone’s guess.
If we zoom out far enough, it’s not difficult to see Ethereum at the heart of a global economic layer that surpasses the GDP of the largest nations on Earth. The journey there will be filled with many dramatic corrections upwards. I believe we are about to witness one of them.
In this preview we look at:
ETH breaks all time high for a second time this month
Miners begin pushing back on EIP-1559
NFT market is bubbling up with a $700,000 “CryptoPunk” sale
DeFi TVL breaks $26 billion
We’ve launched our Discord server. Come and join the conversation!