Last week, I told you why Ethereum will never hit another ATH and promised to come back in a week and give you my targets for Ethereum in the long term. It's been exactly seven days, so let's get to it!
I believe the price of Ether will go up, even though it won't hit another ATH. The two main reasons why are Dai and DeFi. With Tether on the ropes with the recent SEC suit, Dai is a stable coin that is impervious to government control. What this means is that, even if the government sued Maker and seized all their assets, it's still unable to destroy Dai (because of the permission-less quality of smart contracts.) This makes Dai superior to Tether. At any given time, the government could seize/freeze all the assets of Bitfinex, causing Tether to become essentially worthless. This is the Black Swan event that the Tether fudders always predicted.
Then you have DeFi, which stands for Distributed Finance. In theory, any financial instrument which exists in the financial industry can be recreated in the cryptocurrency space. It is being done as I type, and 99% of it is being done with Ether. This is where the first mover advantage of Ether comes into play. At press time you can buy Ether, convert it to Dai, place it in a DeFi savings account, and receive 12% interest per year. That is a better return than you can get with a traditional savings account.
Dai has no competition, and DeFi is mostly being built on Ether. For these two reasons alone, we can assume that the price of Ether will go up, as more and more people are made aware of the possibilities and opportunities available.
So how high will it go? That all depends on how successful the competition to Ether is, and how rational the market is. You can't accurately predict the price of Ether without being aware of the status of Ethereum's competition. At the moment, the only competition to Ether that seems to be making progress is One and Tezos. The only competition to Dai is RSR (and they haven't even launched yet.)
The biggest factor in how high the price of Ether will go, is timing. If we do not see another Bitcoin bull run for a few years, that will be bad for the price of Ether, because the competition will have time to build out their networks. But if we see Bitcoin go to $40k this year, then Ether might actually hit another ATH, because it will cause massive fomo with new people throwing money at Ether irrationally.
Personally, I don't think Bitcoin will hit another ATH any time soon, and that's why I don't think Ether will hit another ATH. If Bitcoin doesn't go to $40k until 2021, that will give Ether competitors plenty of time to build a better product. One problem with Ether is the cost of gas. The higher the price of Ether the higher the cost of gas. Dai is a great stable coin, but it becomes less great when a single transaction to buy or sell Dai is $50.
If the markets are rational and we don't see another bull run this year, these are my targets:
Sell 15% Ether @ $350
Sell 15% Ether @ $450
Sell 20% Ether @ $600
Sell 50% Ether @ $700
Remember folks, if you want to make a lot of money with crypto, you want to take advantage of the volatility. To take advantage of volatility you need cash, as well as crypto. When it goes down you Dollar Cost Average. When it goes up you sell X percent at target 1, and Y percent at target 2 and so on and so forth. It always goes up, and it always goes down, historically A LOT.
Bulls make money, bears make money, pigs get slaughtered.
--Ether Sensei
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Clear explanation and nice analysis, I agree with your analysis, it is very difficult to reach ATH again. In my opinion, actually, if the ETH price can reach $500 at the end of the year, that would be great.
I’d be very happy if Ethereum hit $500. 🤑
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I still can’t believe how many people are holding Tether. DAI is the only stablecoin I trust.
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Still, the current cryptocurrencies have like BTC and ETH have a lot going for them. You say that the competitors can create a better product, but they already had more than enough time to do so and BTC still accounts for basically the whole market.
Great write up. So basically, only a nearby bitcoin bull can give Ether the chance it needs.. I agree.
Makes a lot of sense, I like the thought process on setting those targets. I still think if any other platforms do well eth will have to go up first. Even if they do have tech that gives other advantages in certain areas I think ethereum will be the big leader in terms of value
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Thanks for this important information.
Never say never!
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