Experts in Ethereum have been incredibly bullish over the past few years, including professionals like Simon Dedic and Crypto Michaël, which have released their aggressive Ethereum price predictions. The biggest reasons people are excited today are because of the network’s highly-anticipated 2.0 upgrade coming by the end of 2020, which could potentially cause a significant increase in its price.
Ethereum is Already Up Significantly in 2020
ETH’s price started the year around $130 and is now up over 450% to around $600. This is already a great start for Ethereum investors but can it get to $1,000 before February of 2021?
Many Ethereum experts attribute the rise so far this year to the highly-anticipated Ethereum 2.0 upgrade, which includes moving to a proof-of-stake (PoS) consensus algorithm. This essentially means that “validators” help secure the network (instead of inefficient minors), and for their effort, they earn a reward, similar to an annual interest rate.
Validators will have to stake, or lock up, their ETH on the network in order to participate. The more ETH a validator locks into the platform, the more rewards they’ll earn, so the demand for staking on Ethereum 2.0 is expected to be high. For one, the network needs 16,384 validators to commit a minimum of 32 ETH to the network for Phase 0 of the Ethereum 2.0 upgrade. That’s over 520,000 ETH and at the asset’s current price of $595 (as of November 23, 2020).
A Supply Shock could be Imminent
Once a validator locks up their ETH for staking with Ethereum 2.0, they will be unable to sell their coins for at least a year. This essentially reduces the supply of ETH on the market today, taking them out of circulation and potentially pushing up prices, based on standard supply and demand theories.
Since stakers will be able to earn as much as 18% APY, it’s projected that a lot of ETH will be removed from circulation. The more people invest in Ethereum and hold it to earn interest, the more likely it is that ETH will increase in price.
Ethereum can Radically Scale Up
The move to proof-of-stake will also help scale the network. Considering validators are dedicated to validating transactions, no longer waiting for complex algorithms to be solved, Ethereum’s transactions per second rate is set to jump from around 15 to around 100,000 with its 2.0 upgrade. Not only does this scale make the network more accessible, but it also ensures the budding DeFi market can explode in growth.
Tyler Smith, the sales manager at BC Bitcoin, said at a panel that “Ethereum has consistently delivered a stable and scalable blockchain solution, with many other projects making use of its infrastructure. This trend will likely continue, making it a good investment opportunity for the future.”
Invest in an Ethereum IRA
Individuals interested in investing with their IRA can use our platform to buy and sell Ethereum online 24/7 once it’s released to the public. As awareness grows for Ethereum’s massive upgrade, its high APY return possibility through staking, and its continued adoption, it’s possible for Ethereum to reach new highs. Not interested in staking just yet? Soon you will be able to lend your ETH for up to 7% APY as part of our interest-earning program.
Recommended article: What is Ethereum?