Ethereum finally got caught in the crypto trap that has pulled virtually every other digital currency down this week. It looks like a key linchpin for ether’s sudden drop was a hack that picked the pockets of users of the home-sharing network BeeToken, draining $1 million worth of the digital currency. Still, many of the concerns that exist for other cryptocurrencies also apply to ether, so even if it has been spared the worst of the crypto crash so far, it’s not all blue skies from here on out.
One thing becomes clear when you study every expert’s ethereum price prediction: they’re either all in, or all out. There’s just not much middle ground here.
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Bulls still gripping their ethereum price predictions
Although it seemed clear that the bears have taken control of ripple, bulls may still be hanging on to ether, at least if this list of ethereum price predictions from International Business Times is anything to go by. Of the 17 experts to give their ethereum price prediction to IBT, only one is below $1,000, and it’s so far into bearish territory at a mere $100 that one might wonder what he’s been reading. Still, that’s such a bold prediction that if he’s right, he will instantly become a star.
The majority of the rest of the predictions are in the $1,200 to $1,500 range, although one expert has predicted $2,500, while another estimates the value at $3,000. It’s important to note that all of these predictions are for ether’s price by the end of the first quarter.
Ethereum price prediction: it could overtake bitcoin this year
In 2017, the price of ether skyrocketed in the thousands of percentages, following on the heels of bitcoin. Despite the crypto crash, ethereum still has a lot of ground to cover to close the gap with bitcoin, but one of the more prevalent ethereum price predictions is that it will overtake bitcoin this year.
Indeed, while most other cryptocurrencies were taking a dive this week, it looked like ether had a bit more staying power, as it didn’t really start to slide until Thursday. Early this week, ethereum was hanging on above $1,000, but by Friday, it was down by about 30% after falling below$ 900. Experts set their ethereum price predictions higher earlier in the week because of good things that were specifically targeted at ether.
For example, CoinDesk cited institutional capital flows for the strength in ether. The crypto website also mentioned Venezuela’s plan to create its own petro cryptocurrency on the ethereum network, which means that the Venezuelan government is holding a token sale of ethereum to create its new cryptocurrency.
Bullish themes for an ethereum price prediction
Profit Confidential pulled together a list of reasons for a bullish ethereum price prediction, and one is the steady growth in initial coin offerings based on the cryptocurrency. There’s also a possibility that more use cases for the ethereum network could be created, and the fact that there are so many use cases for it is why the price of ether tokens has blossomed. Some crypto enthusiasts may even be starting to see more use cases for ether or another cryptocurrency than for the original bitcoin, but it will be a while whether we see if this view plays out.
Other reasons for a bullish ethereum price prediction, according to Profit Confidential, include the development of “interoperability,” rising volumes of transactions conducted in it, and “regulatory acceptance of blockchains.”
Interoperability, as an argument, may turn out somewhat neutral for some digital currencies, particularly ethereum, which already has other use cases than as a simple asset. It would be a good thing if various cryptocurrencies could work together, but this is a particularly bullish case for those without such clear use cases and also for XRP, which seems to be gaining in use among banks as a sort of money transfer service.
Of course, one could debate some of these other items and still come up with a reason to favor a bearish ethereum price prediction over a bullish one.
How Venezeula’s use of ether could raise regulatory risk
For example, Venezuela‘s petro cryptocurrency is only a single example of the growing pile of ICOs based on ether, which Profit Confidential lists as bullish for the currency, but of all the ICOs, Venezuela’s in particular may be reason enough for a bearish tilt.
Some experts see the creation of the petro as Venezuela’s attempt to get around U.S. sanctions by conducting business in a cryptocurrency rather than the country’s own embattled currency. Two U.S. Senators wrote a letter to the U.S. Treasury to find out what could be done to keep Venezuela from bypassing the sanctions via its newly created cryptocurrency.
On the surface, one would think that Venezuela’s decision to use ether tokens to base its own cryptocurrency on would be a good thing for the ethereum network. However, the senators’ letter to the Treasury Department calling attention to it just raises the regulatory risk for all cryptocurrencies even further, in our view.
If Venezuela is able to dodge sanctions by do it, then it’s probably only a matter of time before North Korea or other nations facing heavy sanctions do the same thing, either with ethereum or with another cryptocurrency. As a result, U.S. officials will probably act fast to keep it from happening.
Regulators start to crack down on crypto
Even without Venezuela’s ICO, regulators around the globe have been looking for ways to tamp down the rise of cryptocurrencies in general. China, South Korea, Canada, India and the U.K. are just a few countries that are either talking about cracking down on them or have actually put the wheels into motion to do so. U.S. regulators have been warning investors against digital currencies, although they have yet to actually do anything about their warnings beyond cracking down here or there in isolated fits on a questionable company or ICO.
Regulation in general is widely seen as bearish for cryptocurrencies, so it’s hard to imagine a world in which regulators accept blockchains. It probably will happen one day, but there’s no telling how long it will take and what will have to happen in the crypto world to get regulators around the globe to be OK with ceding control over to a deregulated network.