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could ETH outperform BTC in 2020?

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The native cryptocurrency of the Ethereum network, Ether (ETH), needs no introduction. Being the second-most-popular digital currency after bitcoin (BTC), it can boast of a huge fan base and growing interest from modern investors.

However, 2019 was a rather disappointing year for those holding ETH. Even though it peaked at $351 in June, the coin surprised investors with its price going down from $136.55 on January 1 to $132.610 on December 31. 

On the positive side, even after going through many hardships like a hard fork, criticism of the community and the emergence of competitive projects, ETH is still strong enough to stay the second-largest cryptocurrency by market cap. Besides, in recent weeks, Ether has posted higher lows when compared to its peer BTC

With much-awaited Proof-of-Stake transition standing right around the corner, Ethereum price speculation may seem like a quite lucrative activity to savvy crypto traders. Do you also want to profit from the coin’s future price fluctuations but not sure how ETH is set to perform in the months to come? We have you covered. 

In this article, we recap the project’s latest news, review the coin’s recent price movements and check out what the Ethereum price prediction for the rest of 2020 and beyond looks like. 

What has been recently happening to Ethereum?

While BTC has enjoyed a lot of attention over the past few months, investors’ focus is slowly shifting toward other cryptocurrencies. There is a reason for that: the long-pending Bitcoin halving event is now behind us, and the markets are now reverting to their normal day-to-day fluctuations.

Launched in 2015, Ethereum is the largest and most well-established open-ended decentralised software platform. It allows the deployment of smart contracts and dApps to be built and run with no fraud, downtime, control or interference from a third party.

Throughout its history, both the platform and its cryptocurrency have been generating a lot of interest among the cryptizens, allowing ETH market capitalisation to reach a whopping $23.2bn with 111,008,303 ETH as its current circulating supply. At the time of writing, May 21, ETH was changing hands at $209.5 with its daily trading volume exceeding $12.9bn. But will Ethereum rise in value going forward?

While the list of its achievements is rather extensive, newer projects such as Cardano (ADA), EOS, Stellar (XLM), Tron (TRX) and NEO are actively seeking to replace Ethereum as the smart-contract platform leader or share the market by avoiding the technical issues it has faced in the past.

To stay afloat and thrive in the emerging competition, the project’s upgrade known as Ethereum 2.0 was announced. Long being subject to delay, Ethereum’s transition from the Proof of Work (PoW) to Proof of Stake (PoS) Consensus mechanism is finally about to happen, assumingly on June 30, as stated by the core developers. However, some experts, including Ryan Selkis, the CEO of crypto analytics firm Messari, believe the Ethereum 2.0 PoS transition might get delayed until 2021.

Named as Phase Zero, the shift toward Ethereum 2.0 is one of the most awaited events by the crypto enthusiasts as it is supposed to transform the Ethereum network by leaps and bounds.

As many people feel rather optimistic about the upcoming changes in the project, there have recently been reports of Ethereum on-chain metric surging substantially, including transactions per day, average transaction values and daily active addresses. For example, the number of on-chain transactions has increased to around 850,000 per day over the past few months, with an average block time of 13.33 seconds, which is one of the fastest in ETH history.

Ethereum price prediction

Moreover, Ethereum remains one of the world’s leaders in terms of adoption. In 2019, according to a report by Dapp.com, it recorded over 1.4 million active dApp users, a substantially higher number when compared to the 800,000 recorded in 2018.

In regards to Ether, in the project’s own words, “people all over the world use ETH to make payments, as a store of value, or as collateral.”

Ethereum price prediction

In addition, ErisX, a crypto trading platform, has recently launched ETH futures trading in the US, becoming the second cryptocurrency derivatives product on offer in the country. The announcement came a few days after the platform obtained a digital currency licence from financial regulators in New York.

Talking to Cointelegraph, a senior research analyst at Fundstrat Global Advisors, David Grider, commented on the event: “My view is that futures add greater liquidity to the market, which de-risks the asset and has a positive impact on valuations. Overall, it’s good that Ethereum has opened up to the US, and I suspect demand for ETH trading will grow slowly over time as it did for BTC.”

Performance of the second-best cryptocurrency so far in 2020

ETH started 2020 trading at $130 per coin but continued to rally higher as the general crypto market gained an upside momentum. In the middle of February, it peaked at $279 per coin. Such a dramatic boost in value was due to the rising interest in the cryptocurrency space and Enjin launching its game development platform on the Ethereum network.

Ethereum price prediction

After Vitalik Buterin assured the community that the launch of Phase Zero of Ethereum 2.0 is being worked on, ETH managed to stay above the $250 mark till February 25. However, the price then started to drop due to the growing uncertainty over the implications of the Covid-19 virus on the global economy. Besides, the news that CryptoKitties is planning to leave the Ethereum network for its own blockchain has further negatively affected the ETH’s value. On March 13, the coin traded as low as $95.87.

The cryptocurrency then started to soar, reaching $227 on April 30. However, the uptrend was short lived, and May 10 saw Ethereum price drop below the $200 mark, falling from $211 to $184 in one day. At the time of writing, May 21, the coin traded at $209.5.

Ethereum price prediction: could ETH end 2020 as the best-performing crypto?

Regardless of the growing competition, Ethereum remains a very special technology that has the ability to completely change the world as more and more is built on top of the smart contract focused protocol. 

By far, the biggest potential for Ethereum now lies in the upcoming Ethereum 2.0 update and the massive growth of decentralised finance, or simply DeFi.

Last month, the value of the tokens underpinning the DeFi protocols has surpassed $1bn. Over the past year, the number of DeFi projects providing lending services has increased dramatically, with DeFi transactions coming to represent up to one-third of the Ethereum block space. This has significantly boosted the demand for Ether in recent months and will likely support the price of the coin going forward.

With the crypto market moving at a rapid pace, it may be rather difficult to predict its future movements. To bring some clarity on the matter, we have compiled below a list of the Ethereum projections for 2020 and beyond from various sources.

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In 2018, Reddit co-founder Alexis Ohanian told Fortune that while he is very optimistic about the future of BTC and other cryptocurrencies, he is “most bullish about Ethereum simply because people are actually building on it.” He predicted the coin’s value to eventually hit $1,500.

Online analyst Bobby Ullery believes that blockchain technology will soon play a much bigger role in international trade and the overall economy. According to him, Bitcoin and Ethereum will each hold 25 per cent of the entire crypto industry, which he predicts to reach a total market cap of $4.5trn in 2020. For his prediction to come true, the ETH’s value should rise by over 700 per cent.

Earlier this year, a famous crypto analyst, the Crypto Dog, tweeted that ETH looks more bullish than BTC. Another cryptocurrency enthusiast, Antiprosynth, thinks there is a 50 per cent chance that Ethereum may surpass Bitcoin in a few years.

The most optimistic ETH price prediction was given by Brian Schuster, the founder of Ark Capital LLC, in 2018. He stated that “Ethereum is less like one individual business and more like a store of value, like gold,” adding that ETH might reach $100,000 in the following five years.

On the other hand, according to WalletInvestor.com, an online forecasting service, ETH is a “bad, high-risk one-year investment” option. Based on its Ethereum price forecast, the coin is expected to fall to $184 by May 2021. In five years, it predicts this cryptocurrency to trade at $125.9.

Ethereum price prediction

Another Ethereum prediction provided by TradingBeasts.com suggests the ETH price has the potential to fall as low $128.9 by the end of this year.

Ethereum price prediction

Meanwhile, the service expects ETH to trade on an average of $191.3 in May 2021, with a low estimate of $162.670 and a high estimate of $239.221. By the end of 2021, the median price per coin is forecast to be $246.8. For the longer term, Ether is expected to experience steady growth, soaring up to $494 by December 2023.

Based on the Ethereum outlook suggested by another popular forecasting website Longforecast.com, the coin could end 2020 trading at $209. In 2022, it forecasts a steep decline, with the rate falling as low as $109 by the end of the year.

Ethereum price prediction

A much more bullish Ethereum forecast 2020 is offered by Cryptoground.com. It estimates ETH to trade at $256.6 in one year, gaining almost 25 per cent from its current price. The growth is expected to continue, with the coin reaching $1,445 in five years.

Ethereum price prediction

Finally, in the Ethereum price prediction 2020 provided by DigitalCoinPrice.com, the ETH price is expected to experience significant growth. In one year, it predicts the coin to trade at around $497.

Ethereum price prediction

In the end, is Ethereum a good investment?

Seeing these vastly different forecasts, you may now be wondering: “Can I invest in Ethereum now? Is it a safe long-term bet?” Clearly, as with any other asset, there is no definite answer to this question. The challenge with choosing which cryptocurrency to invest in is that the market is very dynamic and rather unpredictable. Its volatility makes it hard to predict what the price of a digital coin could be in a few hours; and even harder to give long-term estimates.

Over the past few years, the crypto market has experienced multiple ups and downs. While all the talks continue to revolve around a bright future of blockchain and digital money, there are still many questions to answer.

For that, when considering Ethereum investing, it is crucial to take into account the latest news, market trends, technical analysis and expert opinion.

If you think you are not ready to make long-term investment commitments, but still want to try to profit from Ethereum volatility, you can do so through contracts for difference, or CFDs. With the ETH price falling and rising to such lows and highs, it is an especially great asset for traders who can take advantage of these price swings with a long or short position.

Trade Ethereum to US Dollar – ETH/USD CFD

Find out how to invest in Ethereum CFDs with our comprehensive trading guide and free online courses.

So, what do you think about the future of this booming cryptocurrency? Will the Ethereum price rise higher or fall into the abyss? Do you have an ETH forecast of your own?

Always stay on top of the latest Ethereum news with Capital.com. 

Read more: Post-halving Bitcoin forecast: what lies ahead for the biggest coin in the market?

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