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Crypto analyst who nailed ethereum’s climb to $3,400 says $10,000 is next
Back in January, when the world’s second-largest cryptocurrency by market cap, ethereum, was trading at just over $1,200, one investor made the bold call of predicting a spike to the mid-$3,000 level, claiming it was being “overlooked” by investors.
Just under five months later, that prediction has already hit with ethereum (ETH-USD) up roughly 400% on the year to cross the $3,500 mark as of Friday afternoon. Now, that same investor, Megan Kaspar, co-founder of the digital asset investment company Magnetic, is upping her price target to the $8,000 to $10,000 price range by year’s end.
Kaspar explained her thesis Friday on Yahoo Finance Live, citing new updates coming to the cryptocurrency’s network later this year. The network is planning a shift away from the same method used by bitcoin (BTC-USD) to confirm transactions to one that is far less energy intensive. Unlike bitcoin’s so-called proof of work, which rewards miners who are competing against each other to use computers and energy to record and confirm transactions on its blockchain, ethereum plans to adopt the more efficient proof of stake model, which chooses a block validator at random based on how much ether it controls.
“The shift to proof of stake for block validation reduces carbon emissions by 99.9%, making ethereum a green technology,” Kaspar explained. “So these two updates on the network alone could push ethereum to a trillion dollar market cap which is where bitcoin is at today — that would make ethereum around $8,000 to $10,000 a coin.”
Ether has outperformed bitcoin year-to-date. The former is up nearly 380%, while bitcoin is up about 90% over the same time period.
As high as Kaspar’s price target sounds, which implies about 300% upside from current levels, it matches the $10,500 price target that came from Fundstrat Global Advisors earlier this year. Analysts there calculated their price target from rising activity on the ethereum network as more and more decentralized applications continue to be built on it. Decentralized finance applications, which allow users to earn yield on their crypto assets similar to the way they would at a traditional bank, have seen usage on the network explode from $10 billion in September 2020 to more than $65 billion as of April.
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After the network changes are implemented, Kaspar also believes a greener ethereum will begin to attract more institutional attention relative to bitcoin. Miners in China account for well over half of all the mining power on the network and investors like Kevin O’Leary of “Shark Tank” have increasingly taken issue with that connection. Kaspar says as more investors take note in the years to come, institutional dollars could propel ethereum to $100,000.
“Institutions are mandating that they invest in clean green technologies and that’s what ethereum is becoming,” she said. “Unfortunately, bitcoin’s proof of work network will not be that unless they choose to shift as well.”
Nonetheless, Kaspar still sees upside for bitcoin, predicting the world’s largest cryptocurrency could hit $200,000 by the end of the year. On Friday, bitcoin was trading at over $57,700 a coin. Pantera Capital CEO Dan Morehead expressed a similar level of confidence for bitcoin’s upside with his $115,000 price target by August, citing his model that tracks bitcoin like a commodity.
As he explained to Yahoo Finance earlier this week, “stock-to-flow” models measure existing supplies, usually of commodities, against the flow at which new inventory is produced. In the case of bitcoin mining, that flow in the form of mining rewards is cut in half roughly every four years. When applying the measure to bitcoin over the last year, Morehead has shown bitcoin’s price has moved in lockstep with projections.
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“When people say, ‘Oh this is crazy,’ I push back. I don’t think this is crazy. I’ve been doing this for 10 years, it’s actually very predictable,” he said.
Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, crypto, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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Is it Ether vs Bitcoin Now? Where is the Crypto Market Headed to?
Is it Ether vs Bitcoin Now? Where is the Crypto Market Headed to?
Ether recently hit new records in its value, will it overtake Bitcoin?
Recently, a relatively new cryptocurrency soared by hitting record heights in value. Ether, the native cryptocurrency of the Ethereum platform, reached USD3,500 on May 6th. The market cap of Ethereum reached USD375.13 billion compared to 22.9 billion last year. Does this mean that Ethreum is going to gain supremacy over Bitcoin?
Bitcoin vs Ether
Bitcoin is still the largest digital currency, followed by Ethereum being the second-largest in the world. Bitcoin has always been the center of attraction and has maintained supremacy over other digital currencies all these years. Once cryptocurrency and blockchain technology was introduced, bitcoin became the most valued digital currency because of its peer-to-peer transaction facility. Bitcoin can be transferred over the internet through a decentralized, transparent network that eliminates the need for a centralized authority like banks.
Launched in 2009, Bitcoin and those engaging in the trade of this crypto through a distributed ledger system do not have to establish trust in each other for smooth transactions. Another reason for its popularity is the less risk of fraud involved, the ease, and the minimum transaction fee. Bitcoins have a market cap of more than USD1 trillion and it has a growing number of institutional investors. Recently, Elon Musk’s Tesla invested USD1.5 billion into Bitcoin making its value soar high. Other companies include Square, MicroStrategy, and many more.
Ether on the other hand is the world’s second-largest cryptocurrency today. Ether enables smart contracts that are faster, resilient, and better than other digital currencies. It also has Decentralized Finance (DeFi) characteristics with high scalability, which makes it desirable among businesses. The recent proliferation of Ethereum has made its Co-founder, Vitalik Buterin, the youngest billionaire. Ethereum is an open-source, blockchain-based platform, which also allows building applications with its programming languages. Unlike the peer-to-peer network of Bitcoins, Ethereum offers the transfer and development of Non-Fungible Tokens (NFT), which can be uniquely processed and transferred by individual users. With a current market cap of more than USD397 billion, Ethereum is being largely adopted. Ethereum has been shining bright since mid-last year.
Where is Crypto Headed?
The crypto market is always volatile with fluctuating prices and values. Hence, it is always advised to be careful while investing in cryptocurrencies, be it Bitcoin or Ether. However, many new cryptocurrencies are popping up every day. Some popularly known cryptocurrencies are Bitcoin, Ethereum, Litecoin, Dogecoin, Ripple, and Zcash (XRP).
Although blockchain was initially recognized with crypto, it has now expanded its capabilities. Thus, crypto use cases will continue to diversify and there will be a growing number of crypto assets and investments. India recently passed a new bill stating the regulations in cryptocurrency trading in the country. The country has not legally banned cryptocurrencies, but it also does not work in favor of it.
There has been an increased institutional interest in cryptocurrency investments. There is no surety in the consistent growth of cryptocurrencies, but it is not going to vanish soon. The underlying technology behind cryptocurrency, blockchain, has gained wide popularity and will see more use cases and industry-wide adoption.