At this point in the cryptocurrency market, we are seeing several tokens across the board experience price increases and show signs of a possible bull run. Bitcoin, for example, is just under the $30,000 mark and some predict that it will cross the threshold by Christmas. And then there is Ethereum, which is just under $2,000 but shows immense promise.
Many Ethereum lovers are convinced that the token can reach the coveted $5,000 mark, which would put it at a new all-time price high. But is this a likely scenario?
Ethereum’s Previous Price Movements
One thing to keep in mind is that Ethereum has gotten very close to the $5,000 mark before. Back in 2021, it reached an all-time price high of $4,892 and stayed within this range until the latest winter kicked in.
This latest winter has certainly been harsh, as it coincided with several high-profile industry collapses and a general air of pessimism within crypto. But right now, there is a lot of excitement about several major tokens beginning to make market gains. Bitcoin, as we know, seems poised to kick off a bull run soon and this is good news for Ethereum. Historically, the fortunes of the two biggest cryptos in the industry have been linked, and when Bitcoin does well, so does Ethereum.
Both also experienced their market slumps at the same time in the last year.
But as Ethereum hovers just below the $20,000 resistance point, there is talk about the token putting this latest winter behind it and reaching new heights.
Recent Ethereum Developments
It is also worth noting that Ethereum has had a lot of developments since its last bull run. First, we must consider the switch from a proof-of-stake to a proof-of-work consensus which was announced by the Ethereum Foundation a while ago. This move cut down the blockchain’s energy requirements by over 95% and made it more environmentally efficient. More than this, it endeared Ethereum to more crypto and blockchain lovers and seemed to put it on a path toward long-term use.
And Ethereum isn’t done reinventing itself as it is currently eyeing its Dencun upgrade which focuses on increasing the blockchain’s scalability. This has always been a bone of contention for Ethereum and partially led to the creation of tokens like Cardano, which are popularly called ‘Ethereum Killers’. But the Dencun upgrade, which should be coming early next year, could finally fix Ethereum’s issue of scalability and improve it for the community.
These improvements are important because they make Ethereum easier to use, both as a blockchain and as a token, which drives demand. This demand, in turn, helps to boost the value of the token in the long term.
Use Cases for Ethereum
Another factor that could propel Ethereum towards the $5,000 mark is its plethora of use cases. While Bitcoin has always been the more valuable of the two tokens, Ethereum seems to have a leg up when it comes to use cases, especially for its blockchain.
Ethereum is essentially the backbone of the Decentralised Finance (DeFi) industry and recently, has been used for the minting of NFTs. NFTs were especially popular in the last two years and this kept Ethereum use high, even as the winter hit. And we can’t forget about D’Apps and blockchain games, many of which are built on top of the Ethereum blockchain.
Outside of the uses of Ethereum for building other assets and applications, its native token has proven to be a solid investment vehicle and a hedge against inflation. It trails only behind Bitcoin in terms of market cap and shows no signs of stopping anytime soon. All its use cases mean that the token has held on to its value over the years and this makes it attractive for investors.
Ethereum, outside of investments, is also used for domestic purposes. Many more businesses are accepting Ethereum as payment for products and services and this includes everything from food to hotel bookings. Even the gambling industry is not exempt as Ethereum-only online casinos have been popping up over the years. Their use only seems to rise as the price of Ethereum increases and this spells good news for investors.
Ethereum famously has a tiered system of gas fees, with consumers being able to save money by bidding with lower gas fees and having their transactions be completed a bit slower.
Why Ethereum Needs $5,000
With all this talk about the things that could propel Ethereum to the $5,000 mark, it is worth understanding why this should happen and what the ripple effect will be. Ethereum performing well is nothing if not indicative of the industry being at a better place. All the conditions that will lead to Ethereum hitting or surpassing the $5,000 mark will benefit other tokens as well.
Hitting the $5,000 mark also means that Ethereum will have a new milestone to chase. When Bitcoin hit $10,000 then $20,000 then $30,000, a new all-time price high became the goal for the industry, and even as a bull run seems near-inevitable, there is now talk of Bitcoin getting to $70,000. Having these goals is important for the industry because it offers a communal milestone to aim for and helps to boost morale.
Ethereum being successful also comes with a plethora of benefits for those who use it. Many investors have been holding on to their tokens through multiple winters and being able to sell at $5,000 will represent a massive profit. For those who bought Ethereum when it was near- $5,000, it will be a chance to break even if nothing else. Ethereum being successful also bodes well for those who use the token outside of speculative purposes.
Those who use Ethereum to buy goods and services could see their buying power increased thanks to the token’s movement. Those whose gambling platform of choice is a site that accepts Ethereum could experience a double-profit situation of sorts. Should they win whatever games they are playing, they will not only get more Ethereum tokens but the value of those that they initially wagered could increase significantly.
We must also talk about the effects that Ethereum reaching $5,000 will have on other altcoins. Ethereum (and Bitcoin) experiencing bull runs tends to lead to more inflow of investment into the crypto industry as a whole. The way many investors see it, if Ethereum is doing well, other tokens are on the same track. So, to take advantage, they will buy other tokens, which shoots up their market value as well. The industry, which has been plagued with layoffs and downsizing in the wake of the last crypto winter, could also see a turnaround.
More money means that crypto and blockchain projects will hire instead of fire and work to expand, which is for the good of all. Finally, we can’t forget about the morale boost that the industry will enjoy if Ethereum cracks $5,000. For years, we’ve heard naysayers claim that crypto is dead. But a win for Ethereum will counter these claims and lift investors’ spirits.
$5,000 In Jeopardy?
Even as Ethereum appears to be racing towards the $5,000 mark, there are still a few things that threaten to jeopardize its progress. Within the Ethereum community, there is some concern that its switch to a proof-of-stake consensus makes the ecosystem more centralized. In its previous proof-of-work consensus, power within the network was based on completing computerized tasks and now, it is based on how many tokens a user already has.
This means, essentially, that those who already have a ton of tokens have more of a say over smaller users, which has rubbed some the wrong way.
As 2023 rolls to an end and 2024 begins, the crypto industry will be watching to see which tokens rise to the top and Ethereum seems to be a top pick. Currently, it is speculated that Ethereum could get to the $5,000 mark, bolstered by whale activity, an overall uptick in the crypto industry, its plethora of use cases, and so on.
If the stars align, Ethereum’s $5,000 rise could benefit investors, other tokens, and the industry at large. We are still only speculating and time will tell whether or not Ethereum can reach its new milestone.
Will Ethereum reach $5,000?
Ethereum is just under $2,000 at the moment and current indicators suggest that it will increase in value over the next few months. Whether it will reach $5,000 is still undermined, though it has an all-time price high of just under that amount.
Why is Ethereum’s price on the rise?
The value of major cryptos is increasing across the board and Ethereum’s price increase is also bolstered by the fact that it has so many use cases and recent developments.
What is Ethereum used for?
Ethereum as a blockchain is used for the development of DeFi, NFTs, and DApps’. Ether, its native token, is used as an investment vehicle, for domestic purchases, as a store of value, and for entertainment purposes like gambling.