After a major rally in 2023, ethereum prices are now around $1,900 and within striking distance of the psychological $2,000 level.
Ethereum bulls say 2022’s crypto winter is finally over, and the ethereum blockchain’s recent transition from an energy-intensive proof-of-work verification model to an energy-friendly proof-of-stake model eliminates a significant hurdle to the ethereum network’s scalability.
As well as bitcoin has performed, ethereum has more than tripled bitcoin’s returns over the past three years. But ethereum bears say ongoing headwinds caused by rising interest rates and argue ethereum could face a more rigorous set of regulations than bitcoin if the Securities and Exchange Commission ultimately classifies ethereum as a security.
Ethereum could catch a bid in the coming weeks following the launch of EDX Markets, a new crypto exchange backed by Charles Schwab, Citadel Securities and a consortium of other Wall Street firms. Ethereum is one of just four cryptos initially available to trade on the EDX exchange.
So far, ethereum prices are up more than 50% in 2023. Still, additional upside in the year’s second half will likely depend on the outlook for monetary policy, further clarity on the crypto regulation front and the growth of decentralized applications, or dApps, on ethereum’s programmable blockchain.
Will ethereum rise in 2023?
Easing inflation numbers, renewed institutional interest in cryptocurrency exchange-traded funds, or ETFs, and a successful major upgrade of the ethereum network have driven ETH prices steadily higher this year.
Ethereum rallied in April as the crypto completed its highly-anticipated Shanghai upgrade, which ended a two-year lockup period on staked ethereum. Following the upgrade, ethereum prices initially jumped to above $2,000 for the first time in eight months.
The Shanghai upgrade was the last major step in ethereum’s transition to a proof-of-stake model, eliminating energy-intense crypto mining from the ethereum network. Some traders were concerned about a potential sell-off in ETH once locked-up coins were released, but that sell-off never materialized.
In addition to a favorable macroeconomic backdrop, ETF issuers Grayscale, Direxion, Roundhill Investments, Bitwise and Valkyrie filed for approval to launch ETH futures ETFs in May.
The SEC has approved a handful of bitcoin futures ETFs but has yet to approve an ethereum futures ETF. The SEC has also repeatedly rejected crypto spot ETFs, citing concerns over investor safety and potential fraud.
But BlackRock filed to launch a bitcoin spot ETF in June, signaling renewed institutional interest in cryptocurrency funds. If the SEC changes its tune on ethereum futures ETFs and bitcoin spot ETFs, it could be a major bullish catalyst for crypto prices.
FXStreet managing editor and crypto analyst Akash Girimath says ethereum has a bullish ascending triangle technical trading setup, suggesting the 2023 ethereum rally could have legs.
“This technical formation forecasts a 45% ascent on the breakout of the horizontal resistance at nearly $2,000,” Girimath says.
If ETH prices break above $2,000, he forecasts a medium-term price target of $2,915.
“As ethereum price gets squeezed at the triangle’s apex, a volatile breakout is to be expected from ETH holders,” Girimath says.
Ethereum price history
The ethereum blockchain went live in July 2015 and spent most of its first few months trading less than $2. Ethereum started generating significant price momentum when skyrocketing bitcoin prices gained cryptocurrency mainstream awareness for the first time in late 2017.
ETH prices hit $100 for the first time in May 2017 and continued their meteoric rise to break above $1,000 in January 2018 following the launch of the first bitcoin futures contracts in December 2017. CME Group’s bitcoin futures represented a mainstream financial institution’s first crypto-related financial products. CME followed up with ethereum futures contracts in September 2022.
Ethereum prices ultimately peaked at around $1,300 in January 2018. Unfortunately, ethereum plummeted to less than $100 by December 2018 as the crypto market frenzy died.
Crypto trading became trendy again during the COVID-19 pandemic in late 2020, and the price of ethereum soared to new all-time highs. Ethereum peaked at $4,865 in November 2021 before rising interest rates triggered a sell-off in cryptos and other risk assets in 2022.
The 2022 sell-off created chaos in the crypto market. Luna and its associated stablecoin TerraUSD (UST) completely collapsed in May 2022, and Tether (USDT) and other major stablecoins temporarily lost their pegs to the U.S. dollar throughout the year.
Crypto exchange FTX and a handful of other exchanges and lenders filed for bankruptcy protection, and investors dumped their crypto holdings out of fear the failures would cause further contagion in the industry. Heading into 2023, investor sentiment was low.
Yet a successful network upgrade and a rosier economic outlook have ethereum on the upswing again in 2023. Regardless of ethereum’s volatile price swings, Mark Fidelman, founder of Fanatics Media and SmartBlocks DeFi, says ethereum stands alone outside of bitcoin as the biggest success in the crypto space in the past decade.
“Not only did it skyrocket in value, but it also busted open the doors to the world of decentralized finance (DeFi) and non-fungible tokens (NFTs). Talk about game-changers,” Fidelman says.
Ethereum price stats
Ethereum predictions
Ethereum is notoriously volatile and unpredictable, along with the rest of the crypto market. However, momentum has been positive so far in 2023, and there are several reasons for investors to believe ethereum prices will continue to trend higher in the coming years.
Ethereum’s utility
Unlike bitcoin, which is primarily used as a store of value and means of value transfer, the ethereum blockchain network has a unique utility for dApp developers. Developers use the ethereum network to develop other cryptocurrencies, trade NFTs and create and run smart contracts and other DeFi applications.
Bitcoin’s overall crypto market dominance has been on the rise, but ethereum’s utility and decentralization has helped it continue to dominate the altcoins. As of June, the ethereum ecosystem had more than 1,870 active developers, more than the next three most active blockchain ecosystems combined.
Ethereum is by far the most popular blockchain for NFT sales. The ethereum network represents more than triple the NFT sales of the bitcoin blockchain and has roughly eight times the NFT sales of any other blockchain, according to CryptoSlam.
Finally, ethereum’s transition away from proof-of-work verification makes the cryptocurrency potentially more scalable and appealing to investors and developers concerned about the environmental impact of cryptocurrency mining.
Environmental, social and governance, or ESG, standards have become popular in recent years, particularly among institutional investors. Popular Wall Street funds may not be able to invest in bitcoin in the future if it doesn’t meet their ESG standards, leaving ethereum as the best alternative.
Ether futures
Besides its utility value, ethereum remains the only cryptocurrency other than bitcoin with futures contracts that trade on the Chicago Mercantile Exchange. Futures contracts are agreements to buy or sell an asset at a specific price at a future date, and they can provide a high degree of leverage that can supercharge investor returns.
Futures trading is particularly popular among institutional investors, and ethereum futures can serve as a useful hedge against bitcoin positions.
Average retail investors can also trade ethereum futures contracts, but the inherent volatility of futures creates an additional dimension of risk on top of an already extremely volatile and risky cryptocurrency.
Can ethereum reach $50,000?
Some market experts have extremely high hopes for ethereum prices in the long term. Tyler Winklevoss, founder of Winklevoss Capital Management and the crypto platform Gemini, has predicted that ethereum’s global market capitalization could eventually equal gold’s. At the time of Winklevoss’ prediction in 2021, gold’s market cap was over $10 trillion, suggesting an ethereum price target approaching $80,000.
Unfortunately, Winklevoss and his twin brother Cameron have raised some eyebrows with their aggressive crypto price targets in the past. The twins famously argued for a bitcoin price of $500,000 in August 2020.
Unlike bitcoin, the ethereum network generates revenue, allowing analysts to attempt to model the appropriate price of the ethereum token based on fundamental analysis.
“We now see (the ethereum) ETH network revenues rising from an annual rate of $2.6 billion to $51 billion in 2030,” says Matthew Sigel, head of digital assets research at VanEck.
Ethereum prices may eventually reach $50,000, but VanEck doesn’t expect the crypto to get there anytime soon.
“Assuming ETH takes a 70% market (share) among smart contract protocols, this implies a token price of $11,800 in 2030, which we discount to $5,300 today at a 12% cost of capital derived from ETH’s recent beta,” he says.