There’s a few fundamental reasons why Ether price will increase in the next few months. It’s important to understand those forces so I decided to put in this post the reasons I believe will make Ethereum price soar to new highs.
1. The Ultimate Bitcoin Hedge
The last bull run of Ethereum in February last year was in the midst of the scaling debate. The blockspace was totally filled up due to Bitcoin high adoption. The debates and uncertainty in the Bitcoin community surrounding the future path that Bitcoin should take was one of the main factor in the increase of price of Ether.
A lot of people were betting on Ethereum as an hedge to Bitcoin. For those who did, it paid off tremendously.
Today we are seeing a lot of uncertainty again in investors mind concerning the controversial Segwit2x fork in Bitcoin scheduled for November. The current core developer won’t be supporting this fork and will keep working on the original Bitcoin.
I think we will see many other forks in the future and the debate on social media concerning the different scaling solution will not end anytime soon. Ethereum will benefit from all this fear and uncertainty.
2.How Could the ICO Craze Affect Ethereum?
There is a huge trend right now on issuing new tokens through initial coin offering( ICO). Over 70% of new ICO are bing issued on the Etheruem platform. This ICO trend will only increase over time.
The American Security and Exchange commission ruled ICO an issuance of security and will be penalizing American company for participating in those ICO.
But American can still invest anonymously into any ICO using the anonymity that Bitcoin offers. The SEC cannot affect the cryptocurrency ecosystem much because it has been created specifically to curb governmental rules.
Millions of dollars are pouring into ICO right now and most of this money goes into project on the Ethereum platform. This trend will only increase over time and Ether value will raise just like a boat on a rising tide.
3. Centralized Governance, Good or Bad?
Bitcoin was first centralized when Satoshi Nakamoto was at the rein of the project. Decision where made quickly and there was no arguing on which direction it should go.
Decentralized decision making has been a huge bottle neck for Bitcoin lately because it’s really hard to come to a consensus on hard questions.
Ethereum is not suffering from this problem because of its founder, Vitalik Buterin. He is in charge of the project and whatever decision he makes, the whole community usually follow him.
This is why every time decentralized decision making slowdown the improvement of Bitcoin, Ethereum tends to appreciate in value.
4. Where is the Community?
Ethereum would survive a bear market like Bitcoin saw in 2014-2016 because of its Community.
We’ve seen it in the past, a trendy cryptocurrency goes up in price and then lose all its value and is never been heard of after. I literally can predict this fate for many hype cryptocurrency today, but Ethereum would survive a long winter.
Ethereum has the second largest one just behind Bitcoin and people using the platform are not all speculator. They are developer, entrepreneur, creator and they would keep on using it no matter what the price of an Ether is.
Protecting my downside on an investment is really important and I think Ethereum will do just fine and come back up in value after a potential bear market.
5. Yes… The New Facebook
Remember My Space? It was the most popular social network… until Facebook came around. Myspace introduced people to Social Networking Site, but Facebook perfected it.
Well Ethereum could be the next Facebook of cryptocurrencies…
Bitcoin has been losing shares of the total value of all cryptocurrencies combined and this trend will probably not stop. Over the past 3 years, Bitcoin went from 95% of total market capitalization of all cryptocurrencies to under 50% today.
On the other hand, Ethereum has been the one taking most of this lost share from Bitcoin. Ethereum now hold 20% of the total market capitalization.
With the growing interest in cryptocurrencies by the public at large, a lot more money is flowing in. I expect a winner takes all situation where a handful of cryptocurrencies would benefit the most and I believe that Ethereum will be one of the big winner.
The Future of Ethereum is Interesting
Many things are on the roadmap for Ethereum.
The first phase of the Metropolis hardfork called Byzantine on block 437,000,000 on 18 October will bring many needed features.
Byzantine will add many things including Zk-snarks, a Zcash technology into Ethereum smart contracts so what is inside a smart contract can stay anonymous.
Change to partial hybrid POW and POS 1/100 block is POS during the second phase of Metropolis called constantinople in late 2018.
The Plasma paper which has a lot of similarity with the lightning network co-authored by Joseph spoon and Vitalik Buterin was recently published and takes you on what might look like Ethereum at full scale. http://plasma.io
There’s a lot of great things ahead for Ethereum and I’ll make sure to follow them very closely.
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