Is Ethereum poised for a comeback in 2022?

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 Is Ethereum poised for a comeback in 2022?
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Highlights

  • Ethereum was one of the most impressive performers in 2021 with its price rising nearly 330% in the year.
  • The fact that Ethereum is switching over to the much more environment-friendly PoS model is definitely a plus factor for the platform’s public image.
  • Despite Ethereum’s declining trajectory since November, when it hit an all-time high of over US$4,800, things have turned around somewhat in the past few weeks.

The year 2021 was a landmark year for cryptocurrency, with a list of top tokens reaching record highs throughout the year.

One of the most impressive performers was the second largest crypto by market cap – Ethereum.

This year so far, by comparison, has been somewhat of a letdown for Ethereum investors, with the token having lost significant ground since November.

What will the year hold for Ethereum? Will its fortune turn around? Well, perhaps the comeback has already begun.

Ethereum’s transformation

The big thing currently on the horizon for Ethereum is its upgrade to Ethereum 2.0. This upgrade will see it go from its current proof-of-work (PoW) model to a proof-of-stake (PoS) model.

This is good for two reasons: the first is that it requires considerably less energy to mine its coins. This became a factor last year following the revelation that Bitcoin (which also uses a PoW model) uses as much electricity each year to mine its coins as a small country.

Secondly, the fact that Ethereum is switching over to the much more environment-friendly PoS model, is a definite plus factor for the platform’s public image in a world, which is increasingly environmentally-focussed.

The more direct result of the switch, though, is the fact that it will vastly reduce transaction costs and reduce transaction times, both of which have suffered under the rapidly increased usership of Ethereum’s network in the past 12 months.

Will Ethereum Hit US$7,000 This Year?

Despite Ethereum’s declining trajectory since November, when it hit an all-time high of US$4,891, things have turned around somewhat over the past few weeks.

The price of Ethereum has gone up from US$2,400 on 26 January to its current price of around US$3,030, signalling to some that a bull market is on the way.

In fact, a panel of 33 crypto experts, for fintech firm Finder, predicts that Ethereum’s price will hit US$7,000 by the end of the year.

However, Finder’s predictions for Ethereum’s price in 2025 and 2030 were 30% and 48% lower, respectively, compared to its predictions from October last year.

Bottom Line

After rising nearly 330% in 2021, Ethereum has seen some correction in its price in 2022 as traders took home some profit. But the year 2022 looks promising for the second-biggest cryptocurrency, given its upgrade to Ethereum 2.0 is due.

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