Ethereum has rapidly become the second most valuable cryptocurrency after Bitcoin. With its recent transition to a proof-of-stake consensus model and its expanded capabilities, Ethereum’s future looks bright. This guide provides a data-driven Ethereum price prediction for the short, medium and long-term.
What is Ethereum (ETH)?
Ethereum is a decentralized blockchain platform created by Vitalik Buterin in 2015. Like Bitcoin, it uses a blockchain to store transaction records. But Ethereum’s key innovation was enabling decentralized applications (dApps) and smart contracts on its blockchain.
The Ethereum blockchain serves as a secured public ledger for verifying and recording transactions. Ether (ETH) is the native cryptocurrency of the platform that acts as ‘gas’ to power transactions and run smart contracts.
Some key aspects of Ethereum include:
Smart contracts
These are applications that run exactly as programmed without risk of downtime or third-party interference.
Decentralized platform
Ethereum operates via a global peer-to-peer network, avoiding centralized control.
Programmable blockchain
Developers can use Ethereum to build and deploy decentralized applications of all kinds.
Proof-of-stake consensus
Ethereum has transitioned to a more efficient proof-of-stake system called Casper that requires less energy.
These features make Ethereum extremely versatile and a promising platform for decentralized finance (DeFi), NFTs, DAOs, dApps and much more.
Factors Influencing Ethereum Price
Ethereum’s growth has been explosive, but not without volatility. Here are some factors that affect ETH prices.
Cryptocurrency Market Trends
Like most cryptos, Ethereum price depends heavily on trends in the overall crypto market. Bitcoin’s price actions in particular have a ripple effect on altcoins.
Gas Fees and Transaction Costs
Ethereum gas fees rising during times of network congestion reduces usage and can suppress price. Efforts like scaling solutions aim to lower transaction costs.
Mainstream Adoption
With increasing real-world Ethereum usage cases in DeFi, NFTs etc. mainstream adoption is rising, leading to higher demand and prices.
Competition
While Ethereum is the dominant smart contract platform currently, competition from projects like Solana, Cardano etc. can potentially erode its market share and affect ETH prices.
Regulations
Regulatory crackdowns or increased clarity on crypto/Ethereum can both positively and…
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