According to experts ‘ forecasts about the price dynamics of Ethereum for 2021, its value will only grow. Despite conflicting opinions about the prospects of such a coin, it is still the second largest cryptocurrency by market capitalization. And investors are actively investing in its purchase to protect their assets from inflation. But while some believe that the value of Ethereum directly depends on the behavior of bitcoin, others believe that in the medium term, ETH will become an independent cryptocurrency, losing its status as an altcoin.
In the course of research initiated by the San Francisco Open Exchange, a high correlation rate of Ethereum with BTC was established. Based on the results of market analysis, experts concluded that ETH almost completely copies the movements of bitcoin. And in General, they have the same reaction to events and news: their exchange rates rise and fall absolutely synchronously.
Analysts believe that this behavior of the cryptocurrency indicates the independence of the asset. In the long run, this may lead to the fact that ETH will lose its status as an altcoin and become completely independent. And this, according to the forecast, will immediately affect the Ethereum exchange rate, which will grow throughout 2021.
Representatives of the analytical Corporation Weiss Crypto agree with this position. They believe that ETH is primarily aimed at investors who are interested in new programming, non-standard technical solutions and are aimed at creating innovative developments. Unlike Ethereum, bitcoin will not be perceived in this way.
ETH is still the most popular coin in this area for mining. This is the conclusion reached by Messari analysts. It turned out that bitcoin and Ethereum together account for about 99% of miners ‘ income. And if the situation does not change significantly, this trend will continue next year.
What will affect the exchange rate
For Ethereum, the status of the second largest coin by capitalization has long been fixed. Therefore, despite the fact that it, like other cryptocurrencies, is completely dependent on bitcoin, it still has a special status.
And this should be taken into account when making a forecast of the Ethereum exchange rate for 2021. In addition, more and more investors perceive the coin as a separate, independent cryptocurrency, due to which its value only grows.
According to experts, next year the value of ETH will be determined by the following factors::
- positive movement of bitcoin (after the growth of its rate, the position of Ethereum will also begin to rise);
- high inflation, a crisis in traditional financial markets and, as a result, a change in investor preferences;
- possible transition of Ethereum to the PoS algorithm;
- development and continuous improvement of developments and decentralized applications that are built on the basis of ETH;
- high attractiveness of the coin for miners.
The positive Outlook
Many analysts do not make a separate forecast of the cost of Ethereum for 2021. They prefer to work only with bitcoin, which is the most capitalized cryptocurrency. It is generally accepted that BTC sets the trend for the entire digital asset market and affects the value of other coins.
Experts who consider Ethereum as an independent cryptocurrency are confident that the release of Ethereum 2.0 will significantly strengthen the coin’s position. This assumption was shared by the developer of the strategy DuckDuckGo Adam Cochran, who believes that this will be a powerful impetus for its development.
This opinion is shared by the co-founder of Ethereum, Joseph Lubin. He believes that the increased demand for decentralized applications will contribute to the rapid development of the project. Although he was unable to say exactly how much Ethereum will cost in 2021, he is confident of positive dynamics and a positive Outlook. And the venture firm Placeholder has already announced the approximate projected cost of ETH. The coin will cost at least $ 7.5 thousand, but only if bitcoin reaches the $ 50 thousand mark.
Ethereum responds quickly to any positive movements in the cryptocurrency market and in the industry as a whole. Against the background of the economic crisis and statements by the authorities of a number of countries about the additional issue of money, investors are ready to invest not only in bitcoin, but also in Ethereum. This will only push the asset to grow and strengthen its position.
The negative Outlook
Not all analysts are confident in the planned growth of the Ethereum exchange rate next year. It is generally accepted that bitcoin affects the value of other currencies only in a positive way. But in the near future, the situation may change, and the coin will give up its positions under his pressure. This forecast was voiced in an interview by a well-known trader Tony Weiss, who believes that investors should not invest in Ethereum. In the near future, its value may significantly decrease and instead of profit, they will record losses.
A negative forecast for ETH was also presented by Bloomberg analysts. They believe that the market situation will change very soon — Ethereum will lose its second place in the capitalization rating. Positions will be handed over to the main competitor of Tether (USDT).