Ethereum demand is up. Supply is under pressure due to lockup by whales and DeFi. Result, price of Ethereum is heading way way higher.
This is the bottom line in this video by Guy at Coin Bureau.
Guy walks us through some of the most important Ethereum updates and what they mean for pricing.
He starts with some context from the previous all time high period of Ethereum. In 2017 there was a huge flood of ICOs that required ETH and that helped feul demand. Most investors were retail investors. The combination of ICO based demand and retail investors drove the price up. The collapse of the ICO approach caused a decline in price, and with only retail investors supporting the price the price declined significantly.
Today there are different investors. There is a huge new demand by institutional investors, most notably Grayscale but many others as well, with up to $2Billion dollars worth of ETH backed up in investments like this. Additionally, many high net worth individuals and institutions that have been buying up ETH, including a large number of “Whales”, those that hold more than 10,000 ETH. Additionally, the use of protocols like DeFI are locking up Ethereum.
In the very near term we expect to see ETH futures being launched and this will result in even more demand. There is a growing conviction that Ethereum is an investment class.
Add to the argument that the US Department of Treasury has just issued guidance that allows US banks to use stable coin approaches (which would be Ethereum based) to settle transactions, which means there will soon be more demand.
ETH 2.0 is also placing demand on the supply of Ethereum since it is locking up Ether. And, the very likely coming of EIP 1559 will make the supply of Ethereum more limiting.
All of this points to more institutional adoption plus more use plus less available supply which means more room for growth for the value of Ethereum.
His price prediction, $2000.00 by the middle of the year.
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