After a tumultuous 2022 that saw the crypto sphere crumble to the ground and a promising start to 2023 which reignited hopes of recovery and a potential bull run, things have been strangely quiet on the cryptocurrency front for the last few weeks. Digital currencies have never been known for their stability and predictability. On the contrary, it was their extreme volatility that turned them into the highly coveted assets we know today. So, it’s only natural for crypto connoisseurs to be rather puzzled by the recent lack of movement in the market, especially regarding big players in the industry like Bitcoin and Ethereum.
Those who have been navigating crypto waters for some time now already know that Ethereum is a force to be reckoned with, not only because of its huge market share but also because of its innovative prowess which has been amply demonstrated over the years. There are several ways to gain access to this leading altcoin, but the best way to buy Ethereum and also the most popular one is through a crypto exchange.
However, not all are convinced that Ethereum represents a good investment at the moment. Many are expressing concerns about Ethereum’s stagnation and rightfully so. The asset has been moving sideways for quite some time now, unable to break above the $2,000 threshold. So, are there any reasons to believe that Ethereum could top its all-time high of $4,815 reached in November 2021? Could this be the proverbial calm before the storm?
Some believe that Bitcoin’s most notable contender is more than capable to make the jump and surpass its record performance. It’s just a matter of several factors coming together to support its ascension. Obviously, there’s no guarantee that the planets will ever align. But since all predictions in the crypto space are made in terms of ifs and maybes, allows us to indulge in favorable scenarios and analyze the developments that could propel Ethereum to new heights.
Widespread use of Ethereum-based applications
Due to its smart contract functionality, Ethereum has become the most popular blockchain platform for the deployment of decentralized applications (dApps). From finance, healthcare and gaming to supply chain management, education or real estate, dApps have permeated nearly every sector and industry due to the numerous advantages they provide, and their prevalence continues to increase.
There are many factors influencing crypto’s value, and utility seems to play a key role in it. Demand for a coin increases when users become aware it has real-life applicability. At the other end of the spectrum, we have coins whose value is inflated artificially by media hype and other external aspects. These tokens cannot maintain their value for long since they have no utility to justify the high price point.
Fortunately, ETH belongs to the first category of coins, being the native token of a network that powers a host of innovative applications across a wide range of industries. As Ethereum’s features continue to evolve, it’s likely that the use of dApps will increase exponentially, thus fueling greater demand for the token.
Enhanced scalability and performance
We’ve already briefly touched upon Ethereum’s obsession with innovation and its forward-thinking approach to development, but we need to expand a bit on the topic. Since the very beginning, Ethereum has followed a clear pathway guided by the desire to streamline and improve its network at all levels, fully aware that in a space dominated by cutting-edge solutions and technical breakthroughs where things move at lightning speed, innovation and evolution are the only way to remain relevant and overtake the competition.
This philosophy has prompted Ethereum developers to focus all their efforts and resources on making the network better, stronger and faster. The Merge has been one of their biggest achievements so far, addressing many of the platform’s longstanding issues like transaction speed and fees, sustainability, safety and scalability. If Ethereum continues down this path of innovation, traders and investors will find the token increasingly more appealing which could boost its price in the long run.
Increased interest from institutional investors
While retail investors’ activity in the crypto space can impact the price of tokens, it’s the big players in the market, namely institutional investors who have the biggest influence on price trends and the evolution of the market.
Over the past few years, we’ve seen more companies and organizations take a special interest in crypto investments, and Ethereum, as the second-largest crypto in the market was one of the main beneficiaries of this growing interest. The trend has already been set with the likes of Tesla and Microsoft holding crypto in their investment portfolios. Hopefully, more big-name brands will join these companies in the future and push the Ethereum price up.
Regulatory clarity
There’s been a lot of talk lately about how crypto regulations, or lack thereof, have created a fragmented and downright confusing regulatory landscape that poses an issue for both crypto companies and their users. On top of that, this past year has been marked by increased regulatory scrutiny from governments and a series of lawsuits against prominent crypto providers.
Ethereum and all the other coins in the market have suffered the consequences of these events. On the bright side, it seems that lawmakers around the world are making progress in developing viable regulatory frameworks for crypto, with the Markets in Crypto Assets Regulation (MiCA) being the most comprehensive piece of regulation to date. This might set an example for the rest of the world and push forward positive regulatory developments which could benefit Ethereum and the crypto industry as a whole.
Final thoughts
At the time of writing, Ethereum was trading for $1,849. But as we’ve come to learn from past experiences, things don’t stand still for too long in the crypto space. There are many factors and events that could pull Ethereum from its numbness and send it on a new price rally that could see the token reach a new price record. Anything is possible in crypto, so even the most optimistic scenarios might come true.