The price of ETH has jumped
The price of ETH the world’s second-largest cryptocurrency by market capitalization has increased by 21% over the past 24 hours to $905.45 .
Data from Coinbase Pro shows the price of the world’s second-largest cryptocurrency by market capitalization has increased by 21% over the past 24 hours to $905.45 at the time of this writing. According to CoinGecko, the market cap of Ethereum is now over $100B.
I predicted a trend that would see projects remodel their tokenomics, something we saw most dramatically in KNC and AAVE (formerly, LEND) but happened countless times with other coins whose governance systems tweaked parameters to boost the value capture of their token. Specifically, I looked at BAT as a prime candidate for doing this, which did nothing during 2020 and continued to underperform.
I also predicted price of ETH a DeFi bubble, one that could “balloon from $650 million to $1.5 billion” or even “double”! This prediction was wildly wrong for two reasons. 1) The total value locked in DeFi climbed not to $1.5 billion, but to $14 billion and 2) we’re not at the bubble stage yet – DeFi’s growth has mostly been organic and I believe it’s so far been (somewhat) sustainable.
In a similar vein, I predicted price of ETH a modest shift of ~$50 million Bitcoin onto Ethereum by the end of the year… In wrapped BTC (WBTC) alone, there is now $2.7 billion BTC residing on Ethereum. renBTC, $330 million and tBTC, $41 million. It’s fair to say that the growth here absolutely smashed my expectations. It also raises questions about Bitcoin’s long run security model, which is paid by transaction fees that are increasingly being harvested on ETH, and cements one of the fundamental value propositions of Ethereum which is its unrelenting capture of all blockchain liquidity.
My final prediction about Libra getting “the green light” was slightly misplaced. Libra has become a shell of its former self. Recently rebranded as “Diem”, the stablecoin is now subject to strict US regulation that risks rendering the project moot. While Diem will no doubt capture some interest, growth is likely to be a slow burn rather than the rocket ship for crypto that was first anticipated.
Predictions for 2021
Looking ahead to next year there are a few events I have my eye on.
While ETH has grown more than BTC this year, it is still nearly 50% down from its all time high. The cryptocurrency has a lot of catching up to do but catching up it will. Here are a few fundamental reasons I expect ETH to achieve the remarkable and break its all time high in 2021.