An Ethereum price prediction of $1,000 within two years is well within reach. That would represent a gain of more than 156% from this week's price of $390.
The surprising gains of 2017 are just a preview of what's to come. The Ethereum price began the year at just $8 and is now at about $390 - a 4,700% increase in eight months.
It wasn't that long ago that Ethereum price predictions of $500, or even $400, seemed bold.
As recently as late July, Ronnie Moas of StandPoint Research had an Ethereum target price of $400. At the time, Ethereum was trading at about $200, so he was forecasting a 100% gain in six months.
A little over a month later, the price of Ethereum is just a few dollars away from hitting that target.
And yet some cryptocurrency experts say Ethereum is still a bargain...
Why the Current Ethereum Price Is "Cheap"
Take Luis Cuende, a 21-year-old tech wunderkind who hails from Spain. Cuende is the co-founder and project lead of a cryptocurrency called Aragon, which had its ICO (initial coin offering) in May. Like many cryptocurrencies, Aragon is based on Ethereum.
Cuende's close association with the Ethereum platform changed his view of its potential value.
"I thought it was expensive one year ago when it was at $13, but today when I see the possibilities created by the technology I think it's cheap," Cuende said in a July 2 interview with Spain-based Itnig. "I believe Ethereum will be worth $1,000 in a couple of years."
Cuende sees Ethereum benefiting from the overall growth and adoption of cryptocurrencies, which is at a very early stage right now.
"Compared to the world's economy, crypto is a tiny drop in a lake, and this lake is a tiny drop in the ocean. The total market capitalization of crypto is $100 billion [it's over $170 billion now], which is nothing in a macroeconomic perspective," Cuende said. "Secondly, crypto hasn't achieved its promises just yet. When it achieves 10% of what it promised to do, I can't even imagine how crazy that will be."
Ethereum has plenty of real-world catalysts driving it already:
- It's become the foundation of the booming ICO phenomenon, through which cryptocurrency-based startups have raised millions of dollars in a matter of minutes. Most new tokens are either based on Ethereum and/or require users to buy the cryptocurrency with Ethereum.
- It's Turing complete, which means the Ethereum network can function as a giant, global computer. That's what makes Ethereum an ideal platform for applications like smart contracts. And it's enabled the creation of a new kind of app, "Dapps," or distributed applications that run on the network.
- Businesses are adopting it. The 150-plus companies in the Enterprise Ethereum Alliance include some of the world's biggest and most prestigious corporations, such as JPMorgan Chase & Co. (NYSE: JPM), Microsoft Corp. (Nasdaq: MSFT), Mastercard Inc. (NYSE: MA), and Deloitte.
With such powerful catalysts as tailwinds, the question isn't whether the Ethereum price will go higher, but by how much.
Here are several Ethereum price predictions for both the short term and the long term...
Every Ethereum Price Prediction Agrees: Big Gains Lie Ahead
Since cryptocurrencies aren't stocks or attached to a national economy like fiat currencies, we have to get more creative when trying to forecast their future value.
One way is crowdsourcing - asking a group of knowledgeable people to make their best estimate based on what they know and expect to happen.
That's what Pascal Thellmann did in June. Thellmann, the marketing and content creator for SocialX, a blockchain network that integrates social media with cryptocurrency rewards, used Reddit to solicit Jan. 1, 2018, Ethereum price predictions from the Ethereum community.
Thellmann filtered out the obvious outliers and did some math. The median estimate was an Ethereum price of $620, a 59% gain from the current price. The average estimate was $711, an 82% gain from the current price.
Another idea is to use the average number of daily transactions to calculate a price. Ken Liu, a cryptocurrency trader and consultant, discovered that price increases are linked to transaction volume.
In a Quora post in May, Liu noted that the Bitcoin price has increased exponentially to the rate of transaction growth.
Using that formula, Liu estimated an increase in Ethereum's average daily transactions of between 2 and 2.5 times the rate at the time (about 140,000) would result in an increase in the price of Ethereum by a factor of between 4 and 5.25. This would yield a price between $420 and $551.
That was on May 17. Since then, Ethereum transaction volume has indeed increased about 2.5 times. And the Ethereum price is nearing $400 - four times what it was when Liu wrote the post.
For Ethereum to reach $1,000, we'd need to see transaction volume reach about 600,000. And it might not take long to get there. Ethereum daily transaction volume is about 350,000 now - up more than 700% this year alone.
At the rate it's increasing, it could happen before the end of this year, or early in 2018 at the latest.
Now, let's look at a long-term Ethereum price forecast...
How Ethereum Could Reach $2,000 in 10 Years
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.