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Introduction:
Ethereum (ETH) has been one of the biggest gainers this year, rising from $8 in January to over $650 in June 2018, which constitutes an unbelievable 3600% increase in price in just six months. Today the price has returned to just under $500 but that's still way up from where it was a few months ago.
This price increase led many to ask if Ethereum will reach $4,000 by the end of 2022. For that to happen, the crypto coin needs to hit $1,780 by the end of this year and over $3,850 by the end of next year.
What is Ether?
Ether is a virtual asset that runs on the Ethereum blockchain. It is used to pay for transaction expenses and computational offerings at the network. Ether has been growing in popularity and value since it was first created in 2015. As of January 2021, one Ether is worth over $1,200. Some experts believe that Ether could reach $4,000 by the end of 2022. If this prediction is correct, then Ethereum's price will have increased by over 400% within five years.
Experts believe that Ether's price will increase so dramatically because more people are using the platform. In fact, there are more transactions processed on Ethereum than all other cryptocurrencies combined. Additionally, cryptocurrency investors who trade through an exchange like Coinbase can trade their Bitcoin or Bitcoin Cash into the ether and vice versa; this increases demand for both cryptocurrencies. Finally, businesses are adopting ether as well because of its smart contract technology which offers an opportunity to create decentralized applications (DApps) without middlemen or third parties controlling them.
How Does Ether Work?
Ether is a virtual asset that runs on the Ethereum blockchain. It is used to pay for transaction expenses and computational offerings at the network. Ether isn't always managed via way of means of any authorities or vital bank. The delivery of ether is capped at 18 million steps per year. Ether can be bought and sold on exchanges like Coinbase and Gemini.
Ethereum's price has been on a tear in recent months, rising from around $200 in October 2020 to over $1,400 in April 2021. That represents a gain of over 600%. Some analysts believe that ether could continue its run and reach prices as high as $4,000 by the end of 2022.
Ethereum Compared To Bitcoin
When it comes to digital currencies, there are two that tend to dominate the conversation: Bitcoin and Ethereum. Both have their own benefits and drawbacks, but Ethereum has been on a tear lately. In fact, some experts believe that its price could hit $4,000 by the end of 2022. Here's a look at how Ethereum compares to Bitcoin. First, let's take a look at the market cap. The total value of all outstanding bitcoin is currently around $77 billion. Ethereum holds an equivalent value with about 87 million ether tokens outstanding worth about $68 billion (at the time of publication).
One other important difference between these two cryptocurrencies is in the way they're mined. With Bitcoin, miners compete against each other using processing power. With Ethereum, miners compete against each other using graphics cards or GPUs. You can see why this is important when we consider the increasing power of mining technology over time. Graphics cards will likely be outpaced by new hardware long before processing power is overtaken as a means for mining cryptocurrency.
Security And Scalability Concerns
Ethereum has had a great run so far in 2021. The price of ETH has quadrupled since the beginning of the year, and it doesn't show any signs of slowing down. But is this sustainable? Some experts are predicting that ETH could reach $4,000 by the end of 2022.
But there are also concerns about Ethereum's scalability and security that could hold it back. Critics say ETH can only process 15 transactions per second compared to Visa's 56,000 transactions per second. Additionally, there have been several high-profile hacks involving Ethereum wallets this year (including one with over $150 million worth of digital coins).
How Do Smart Contracts Work?
Smart contracts are self-executing contracts with the phrases of the settlement among purchaser and vendor being immediately written into traces of code. This code is stored on the blockchain and is visible to all parties involved in the transaction.
Once the conditions of the contract are met, the contract automatically executes and completes the transaction. The use of blockchain technology in conjunction with smart contracts provides a reliable way for people who don't know each other to create a deal and execute it exactly as agreed without the need for any third-party verification.
Will Smart Contracts Replace Lawyers?
It's no secret that lawyers are expensive. And, as the world becomes more digital, it makes sense that our legal contracts would follow suit and become digital as well. This is where smart contracts come in. Smart contracts are digital contracts that self-execute and self-enforce. This means that once the terms of the contract are met, the contract will automatically execute itself.
No need for a lawyer! Or even an arbitrator! A smart contract is what you make it out to be. With their transparent nature, security features, and potential for automation, these contracts have huge implications for every industry out there. Businesses large and small can use them to manage agreements between customers or suppliers or just about anyone else with whom they might do business.
Investing In Ethereum And Other Altcoins
Based on the current data, it is unlikely that Ethereum will reach $4,000 by the end of 2022. The market would need to see a significant increase in demand for Ethereum, which does not seem likely given the current market conditions.
Even if there is an increase in demand, it is doubtful that it would be enough to push the price up to $4,000. However, anything is possible in the cryptocurrency market and Ethereum could surprise us all by reaching this price target. What are your thoughts about it? Let me know what you think in the comments below!
Conclusion
The analysts at Canaccord Genuity are pretty bullish on Ethereum. They believe that the price of ETH could reach $4,000 by the end of 2022. This would represent a more than ten-fold increase from its current price levels. While this is certainly possible, there are a number of factors that could affect the price of ETH in the coming years.
These include regulation, competition from other cryptocurrencies, and global economic conditions. If any of these circumstances change dramatically, then it is likely that the price of ETH will also change. It should be noted that prices for cryptocurrencies have been volatile recently so these predictions may not come true.