Ethereum (ETH) Price Prediction 2022

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When it comes to an Ethereum price prediction, some experts say the cryptocurrency could reach record prices in 2022. However, a continuous downtrend has been forming. An uncertain macroeconomic environment could continue to drive the price lower just as easily.

What Is Ethereum?

Ethereum is a layer-1 blockchain solution and the second most valuable cryptocurrency globally by market capitalization. Ethereum’s decentralized ecosystem focuses on banking, gaming and app creation, leading to it being dubbed the “world’s programmable blockchain.” Ethereum is also the name of the native cryptocurrency on the Ethereum blockchain.

How Does Ethereum Work?

Wondering what the ethereum coin can do? As the native cryptocurrency of the Ethereum blockchain, it is used for transactions across roughly 3,000 decentralized applications built on the blockchain by the developer community. Also, validators receive rewards in ethereum in exchange for securing the network, storing data and processing transactions.

Many holders retain ethereum tokens with the expectation that as the network grows, so will the value of each ethereum token. Ethereum holders can also “stake” their crypto with reputable exchanges such as Binance.US and Coinbase to earn interest from the asset. 

Ethereum (ETH) Price Prediction 2022

Investors can examine the ethereum price prediction from two angles: the bull case and the bear case. The most bullish analysts previously predicted that ethereum could reach over $4,500 in 2022 if the recent “Merge” upgrade were to prove successful, according to NextAdvisor.

A large panel of industry experts surveyed by Finder have tempered their predictions since earlier this year, in light of a price drop following The Merge. While most expect prices to remain at $1,000 or above for the rest of the year, the majority now predict an upper limit of $1,999 for the rest of 2022.

The Bull Case for Ethereum

The adoption of the Ethereum blockchain has sped up drastically in recent years. It is a leader in terms of the number of developers and growth in transaction volume. Moreover, brand recognition has increased, and the price of ethereum tokens has appreciated significantly.

There are now roughly 600 crypto exchanges processing billions of dollars in transaction volume every single day. Separate from exchanges, neobanks such as Revolut and established fintech giants like PayPal have joined the cryptocurrency revolution to meet customer needs. Crypto has become more accessible in general, and for ethereum — as one of the most prominent crypto assets — this is favorable.

Perhaps the most exciting development this year is “The Merge,” which launched in September. The upgrade shifted the network from a proof-of-work mechanism to proof-of-stake, eliminating the need for mining. Staked ethereum now secures the network.

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This is a major milestone as part of the Ethereum 2.0 rollout, which aims to improve scalability and reduce transaction fees. The weeks leading up to the Merge saw record inflows as investors bought up tokens in anticipation of the upgrade, CoinTelegraph reported.

Although prices dropped before completion of the upgrade was announced, perhaps due to investor exhaustion prompted by multiple launch postponements, 83% of Finder’s expert panelists believe The Merge was intended to have a long-term effect, not a short-term one. Nearly half say a decline in the amount of new tokens entering circulation will have the biggest positive effect on ETH prices post-Merge and 40% say staking will have a moderate deflationary impact on ETH.

At present, 30 transactions are processed per second on the Ethereum blockchain. The Merge could increase that by 10%, according to a Citigroup research report detailed in a CoinDesk article. A future planned upgrade nicknamed the Surge is expected to grow transaction processing speed to 100,000 per second.

Last but not least, a key measure to examine is the crypto fear and greed index. The indicator shows the market is currently in “Extreme Fear” territory. That means there’s room for increased demand, which could support higher ethereum prices.

The Bear Case for Ethereum

One of the primary concerns is the macroeconomic environment. Almost all asset classes declined in the first half of 2022, suggesting a risk-off market is underway. Fears of a “crypto winter” have arisen as a result. Ethereum transaction volume has been volatile in recent months, possibly due to fears of a retraction in overall consumer spending.

The Ethereum founder himself, Vitalik Buterin, has also expressed concerns recently about exuberant non-fungible token trading. Many NFT marketplaces, such as OpenSea, value NFTs in ethereum. So, should there be a decline in the NFT wave, which is tied closely to cryptocurrency, it may result in negative consequences for the ethereum price because of a sell-off.

On top of that, the Ethereum blockchain faces growing competition from other layer-1 blockchains, all of which perform similar functions. These include:

• Solana
• Cardano
• Tezos
• Polkadot 
• Avalanche
• Near Protocol

Ethereum has been criticized for its inefficiencies in scalability and high transaction fees. Some of these blockchain rivals — dubbed “Ethereum killers” — are beating it on certain performance metrics.

The collapse of terra luna earlier this year also has created negative sentiment. The overall crypto market experienced broader selling pressure due to a loss of confidence in May.

Expert Opinions

Several experts have weighed in on ethereum’s price. 

Winkelvoss Twins on Ethereum

Tyler and Cameron Winkelvoss are the billionaire founders behind the crypto exchange Gemini. The pair predicted a “crypto winter” — a period of flat trading — in the near term. This is due to the unpredictability of the current macroeconomic environment.

Kevin O’Leary on Ethereum

The “Shark Tank” billionaire referred to the current “panic event” as a “great buying opportunity” in an interview on the “Impaulsive” podcast. However, he previously proclaimed that ethereum will always be second-best to bitcoin, according to CNBC. O’Leary has diversified across multiple crypto assets and is an advocate for the space.

James Wang on Ethereum

Last year, the ex-ARK Invest analyst compared Ethereum to where Amazon Web Services was in 2015. He has made an ETH price prediction that sees it possibly reaching $40,000 per token one day.

Final Take

Current developments such as inflation are likely to have knock-on effects in the back half of 2022 for Ethereum. While the blockchain has exciting developments on the horizon, ETH is unlikely to reach new all-time highs this year. That being said, the long-term potential is still intact.

Daria Uhlig contributed to the reporting for this article.

Information is accurate as of Nov. 11, 2022.

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