Earlier today we reported on the “unprecedented demand” for Bitcoin and cryptocurrencies. As we reported, this very strong demand is the driving force behind pushing the price of cryptocurrencies to all time highs and beyond.
Bitcoin has already more than doubled its previous all time high price of just under $20,000 back in 2017. On the other hand, Ethereum has only recently approached its all time high price from early 2018.
Our prediction for the price of Bitcoin this year is well into the 6 digit range. However, what is our prediction for the price of Ethereum this year?
Here are three Ethereum price predictions made by financial professionals, followed by our own prognostication.
Raoul Pal Ethereum Prediction For 2021 and Beyond
Raoul Pal is well known in financial circles. He is CEO & Co-Founder, Real Vision Group & Global Macro Investor. Raoul Pal leads Real Vision to provide unparalleled access to the very best insights and analysis from the brightest financial minds. He prides himself on being a Business Cycle Economist, Investment Strategist, and Economic Historian.
In a very recent video he states:
But it suggests that Ethereum could go to $20,000 on this cycle. Over time, I believe, and if you look at it, the adoption actually of market cap versus number of wallet addresses of Ethereum is ahead of, significantly ahead of where Bitcoin was.
And you see the distribution of returns – Again, I put some of that on twitter. I’ve written this whole piece. I will do a piece of Real Vision crypto in the next couple of weeks. It shows potentially that Ethereum is getting adopted faster and will potentially have a larger market cap than Bitcoin over time.
Again, I’m not putting a “flippening” happening immediately, blah, blah, bl;ah, I’m talking about platform versus asset. And the platform is often more valuable than an asset.
When Raoul states that Ethereum “could go to $20,000 on this cycle”, he is talking about this year, as in 2021. “This cycle” refers to the next 4 year cycle top, due around Christmas of 2021, or a few weeks later.
Longer term, meaning possibly a decade or so, Rauol believes that the price of Ethereum could be higher than the price of Bitcoin. You can see his full Ethereum prediction in this video:
Tyler Winklevoss 2021 Ethereum Prediction
Tyler Winklevoss recently gave an interview in which he predicted that Bitcoin would eventually be worth at least $500,000. In the same interview he also made some forecasts for Ethereum. he stated:
“So, you know, Ether’s got to upgrade. It’s moving to ETH 2.0. There’s some scalability things it’s got to work through. But, like, I’m an optimist and the smartest folks in the room are working on it. So if Ether’a the global computer in the future, what’s that worth? It’s gotta be a ton, and it’s gotta be worth as much as digital gold I would think, maybe more.”
Previously in the interview he stated that digital gold would be equivalent to a $9 trillion market cap. At the time of the interview a couple of weeks ago, the market cap of Ethereum was $84.56 billion. If the total market cap of Ethereum grows to $9 trillion, that would mean that each Ethereum token would be worth about $78,000 a piece, assuming that the growth of the number of new Ethereum tokens created each day continues at the same pace.
Tyler’s full interview can be viewed in this video:
Blocktown Capital’s James Todaro ETH Prediction For 2021
James Todaro, managing partner at Blocktown Capital, thinks that ETH has the potential to reach a $1 trillion market cap on the basis of the growing DeFi industry. According to his estimate, the value of Ethereum could surge to $9,000.
Our Own Ethereum Prediction For 2021
When looking at the fundamentals, we can clearly see that blockchain is a disruptive technology that will invade all of finance and the economy just as software has done in the past 50 years. Fundamentally speaking, crypto is the future.
That’s the basis for our forecast of the continued growth of the industry.
Fundamentals vs. Technicals
When it comes to price forecasting, we always want our technical price analysis to dovetail with our fundamental analysis. Our technical analysis looks at past price behavior, and our fundamental analysis sheds light on whether or not we feel it likely that previous price trends will continue or not.
In the case of Ethereum, like the 3 analysts above, we do feel confident that the positive price trends will continue.
The 4 Year Cycle In Crypto Prices
There is clearly a 4 year cycle in the cryptocurrency market. The next 4 year cycle peak is due around December of 2021.
Bitcoin has gone through 2 complete cycles, but Ethereum has not. With less of a track record, it makes it more difficult to predict where the price of Ethereum will be at the end of 2021.
Looking back at the previous year which was a 4 year cycle top, 2017, Bitcoin started the year on January 1, at $998.33. It ended the year on December 31, 2018 at $14,156.40, after climbing over $19,400 in mid December of that year. Depending on whether you’re looking at the highest price reached in mid December or whether you’re looking at the end of the year price, Bitcoin went up by a factor of between 14x and 19x during the last 4 year cycle top.
While this performance is still exceptional, it is quite a bit less than the gains from the previous 4 year cycle top that happened 4 years prior, in 2013.
Bitcoin started that year on January 1, at $13.30. It ended the year on December 31, at $805.90, after climbing over $1,237 in early December of that year. Again, depending on whether you’re looking at the highest price reached in early December or whether you’re looking at the end of the year price, Bitcoin went up by a factor of between 60x and 93x during the last 4 year cycle top.
The point of looking at Bitcoin’s first two cycles is to see that the first cycle saw larger percentage gain than the second.
Ethereum’s One Cycle Iteration
Ethereum wasn’t created/released until July 30, 2015, so there is no price data from 2013 – it didn’t exist back then.
So Ethereum’s price performance in 2017 was only it’s first 4 year cycle top.
We therefore anticipate that – just like had occurred with Bitcoin – the gains of the second 4 year cycle peak would be less than those of the first 4 year cycle top.
So, how did Ethereum fare in 2017, and what can we extrapolate for 2021?
Ethereum’s Past Price Performance
Ethereum started 2017 on January 1, at $8.20. It ended the year on December 31, 2017 at $736.77, after climbing to $800 in mid December of that year. The Altcoins had a cycle peak that was a couple weeks after Bitcoin reached its ultimate peak. After closing out 2017 at $736.77, Ethereum reached its 4 year cycle peak 2 weeks later on January 13 at $1,423.20. Depending on whether you’re looking at the highest price reached in mid January or whether you’re looking at the end of the year price, Ethereum went up by a factor of between 89x and 173x during 2017 for the last 4 year cycle top.
To recap, Bitcoin went up by 60x and 93x during its first iteration of the 4 year cycle peak, and 14x and 19x during its second iteration.
Ethereum has only seen one 4 year cycle peak during its existence, going up between 89x and 173x.
Price History As A Guide
If Ethereum follows Bitcoin’s lead and the rate of increase slows by the same amount that Bitcoin’s did from the first iteration to the second, that would mean that this year Ethereum will “only” go up between 18x and 34x.
With Ethereum starting the year at $729.12, that equates to a predicted price high between $13,124 and $24,790.
That’s our Ethereum prediction.
As the saying goes, “past performance does not guarantee future results.”
Like all future predictions, at this point in time we don’t know if the forecast is accurate or not, but as of press time, we have a high degree of confidence in our forecast price range being reached.
Time will tell.