Ether (ETH), the second-largest cryptocurrency in the world, has shown strong potential for growth despite trading below its all-time high. Over the past year, it has surged nearly 70%, but it still lags about 35% behind its peak of $4,815 reached in November 2021.
Some bullish investors have high expectations for Ether’s future price. VanEck’s Matthew Sigel and Patrick Bush predict it could reach $11,800 by 2030, while Cathie Wood of Ark Invest believes it could soar to $166,000 by 2032. While these estimates should be taken with caution, there are reasons to believe Ether could continue to rise.
Here are four key factors driving Ether’s potential growth:
1. Interest rates are stabilizing: The recent decision by the Federal Reserve to keep interest rates unchanged and expectations for lower rates in the future could attract more investors back to cryptocurrencies like Ether.
2. Declining supply: The Ethereum Network has implemented changes to reduce supply and stabilize market prices. The switch to a more energy-efficient proof of stake method has made the network deflationary, with more Ether being burned than issued.
3. Possible ETF approvals: While the SEC has been hesitant to approve Ether ETFs, recent approvals in other countries could push the agency to reconsider. ETF issuers may also take legal action to speed up the approval process.
4. Growth of decentralized apps: Ether’s open-source network allows for the development of decentralized apps and other crypto assets, driving adoption as companies roll out new services that are not tied to traditional financial institutions.
Investors should be prepared for volatility when investing in Ether, as it can experience significant price swings. It is important to only invest money that can be held for the long term to weather the ups and downs of the market.
Leo Sun does not hold any positions in the mentioned stocks. The Motley Fool has positions in and recommends Bitcoin and Ethereum.