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Ethereum price forecast: will Ethereum crash?

Kristina Frunze | Jun. 8, 2017
Ethereum price forecast: will Ethereum crash?

Among the top cryptocurrency to invest Ethereum is gaining more attention by the day. Following the 2017 Bitcoin Price Forecast we would like to cover Ethereum price forecast and see if Ethereum will crash.  How long will Ethereum rally last?

8 June, AtoZForex Digital currencies are taking over the world! Where Bitcoin has just hit the new record high, another cryptocurrency, Ethereum, is gaining crazy popularity among traders. Indeed, blockchain technology appears to be the next big thing.

Cryptocurrency price rise is of course, driven by the demand and the curiosity among the many novice investors who are attracted to the massive daily volatility in these futuristic tradable instruments. The more people interested in these instruments, the more demand. The more demand, while limited supply, the higher prices. Economics 101!

Bitcoin and Ethereum comparison

Let's look into Bitcoin and Ethereum comparison. Just like Bitcoin, Ethereum is based on a disseminated open Blockchain network. Even though there are some technical differences between these two, the key difference between Bitcoin and Ethereum is the function and the potential of these cryptocurrencies.

Let’s look into some Bitcoin and Ethereum comparison details:

  • Bitcoin is providing one particular practice of the Blockchain technology. This is peer-to-peer electronic cash instrument that allows you to execute online payments in Bitcoin. The Bitcoin Blockchain is utilized to monitor ownership of the Bitcoins. Now, the Ethereum Blockchain is focusing on managing the programming code of any decentralized application.
  • Another significant difference between Bitcoin and Ethereum - in the Ethereum Blockchain, you have to work to earn the Ether, instead of mining for it. Ether stands for the name of the token of this cryptocurrency. In addition, Ether is utilized by the application developers to pay for the transaction fees and services on the network.

Ethereum has initially been designed for the support of so-called smart contract applications. A smart contract is a special program that is able to automatically execute the terms of the contract when particular conditions are reached.

Ethereum price chart

When we look into online search queries, Ethereum price forecast and Bitcoin price forecast are among the top search queries. Ethereum has hit another fresh record high this Wednesday, as the Asian cryptocurrency demand keeps on rising. This Wednesday, the highest Ethereum exchange rate has hit all time high of $265.51. This implies that Ethereum has advanced 3.116 percent from the level it held on the 1st of January, $8.52. Which rises the question: WHEN WILL ETHEREUM CRASH? OR WILL ETHEREUM CRASH?

Ethereum/US Dollar (ETH/USD) Price Chart below shows how strong volatility can be in cryptocurrency market. As of the moment of writing, the Ethereum price stands at $260.11.

Ethereum/US Dollar (ETH/USD) Price Chart - Will Ethereum crash

Why is Ethereum price rising?

There are several reasons why Ethereum price is rising:

Ethereum price rise reason 1 - Cryptocurrency Awareness: As the Ethereum is recognized by more and more companies to support smart contract applications, the demand for this digital currency has advanced. In fact, the large part of the demand for the Ethereum is coming from the South Korea – about 38 percent.

Ethereum price rise reason 2 - Enterprise Ethereum Alliance (EEA)Another significant driver of the Ethereum rally is the group called the Enterprise Ethereum Alliance (EEA). The group has recently discovered the way to connect large companies to technology vendors in order to utilize blockchain in the working process. Some of the companies that have been supporting the Enterprise Ethereum Alliance (EEA) launch are JPMorgan, Microsoft, and Intel. Another 86 firms have been added to the partnership that is providing legitimacy to the cryptocurrency.

Ethereum price rise reason 3 - ICO: There has been a spike in initial coin offerings (ICO). The ICO is the new way how cryptocurrency start-ups raise the funds. Indeed, a startup called Brave launched a coin offering to fund a new web browser and raised the equivalent of $35 million in about 30 seconds. Such capital attraction would have never been possible with fiat currency modeling.

Ethereum price rise reason 4 - Bitcoin: As strange as this may sound, the main Ethereum price rise reason is Bitcoin itself. As long as Bitcoin prices will keep on rising, people will look on other potential cheaper coins as not everyone is capable of putting $2700 in Bitcoin even though people can buy buy Satoshis.

Ethereum price forecast

It may sound too good to be true, but our Ethereum price forecast algorithm suggests that Ethereum market capitalization could surpass Bitcoin in 5 years period.

The price of Ethereum is not moving higher just by chance. These days, the overall investor appetite for the digital currencies is on the rise. Cryptocurrency price rise as we mentioned above, is due to the supply/demand action. Moreover, this trend is just at its starting point, meaning that during the following years, digital currencies will be gaining more and more popularity. This also could mean that the cryptocurrency bubble is going to develop. However, many of experts state that this is not going to happen anytime soon. Of course there are contingencies too.

As of now, the total market capitalization of all cryptocurrencies has passed the $100 billion level. Taking the giant potential behind the cryptocurrency and the speed of Ethereum adoption among banks, this digital currency is set to have a promising future.

Banks are realizing that they can not completely ignore cryptocurrencies.Combined with central banks looking into these developments, we could possibly see further rise in Ethereum price as well as Bitcoin price. Meanwhile, this rally is mostly lead by Brazil, US, Argentina, India and Russia.

Will Ethereum crash?

ICO is what we mentioned above in the Ethereum price rise reason 3. Blockchain has attracted enough capital that crowd funding will never have. Furthermore, blockchain backed ICO is much more scalable. Indeed, some of the current developments could remind us parts of the Dot Com bubble of 2000. Venture Capitals are attacking profit opportunities driven by the ICOs and blockchain technologies.

"Ethereum price is justified by whatever someone else is eager to pay for it."

That is why some of the market experts believe that the Ethereum’s value can go up five times during 2017. The rough 2017 Ethereum price forecast stands at $550 as a primary goal, and the following target is of course the big figure of $1000. Will Ethereum crash? The answer to this question involves a few projections:

  • Will Bitcoin price continue rising or we will see a dot com like bubble burst?
  • Could we see any possible big wallet hacks?

Indeed during the MoneyConf this week in Madrid, this subject was among the top agenda points. Many startups at the moment are focusing on AI as well as cyber security points to make sure that there is no other MtGox like hack in the future.

Rest be assured that there will be many other new cryptocurrencies popping up here and there and many cryptocurrencies will fall. Which ones? Only time will show!

Do you have something to add to this Ethereum price forecast? Let us know in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.