The Ethereum network is planning a transition into a more stable layer. However, as it plans the highly anticipated “mega merger”, competing networks with superior propositions are stepping up, narrowing the gap in DeFi, NFTs, and other pertinent sub-sectors. Even still, ETH remains the second-largest crypto, and Ethereum the most preferred network, at least as per recent statistics.
Ethereum is a massive blockchain infrastructure that runs Dapps and massive NFT communities that have come to prominence off-late. Tough legislation, increased interest rates by the Federal Reserve, and the war in Eastern Europe have adversely affected the wild prediction concerning the price of ETH. Caught in an extended bull run in the crypto markets in late 2021, ETH was doing well, reaching a peak of over $4.5K. The peak represents over 1,000,000 percent worth of returns for a lifetime holder. The coin only came to life in 2015, with a valuation of less than $0.5. Click here to know more of this crypto asset.
Noteworthy, the headwinds that gripped the cryptocurrency market that also saw Bitcoin prices fall by over 50 percent impacted ETH too. The coin spiraled to less than $2.5k.
ETH is the fuel to a massive smart contracting network; it powers many things that are important to miners, traders, and dApp developers. The community, plus the reputation Bitcoin has built for crypto assets over the years, has kept ETH going.
Biden’s Legislative Order on Crypto—What Does It Mean to ETH?
New developments in the U.S. might see an exponential rise in crypto trading in Hawaii and many other places on the mainland. Biden’s push for more regulations and study on the viability of having a government-backed cryptocurrency are sentiments that rallied the crypto stock market recently—making some close higher than the previous day.
The announcement is an indicator that 2022 is a stepping-stone to having more cryptocurrency along with Fiat in the financial ecosystem. The executive order by Biden and open economies globally following a tight grip by Covid-19 will surely help ETH reach new highs this year.
Regulation might be the dimming factor for cryptocurrency, though, as most people fancy them because respective governments do not have a tight hold on them.
Is this the Year for ETH?
With uncertainties presently surrounding the markets, it is hard to tell whether ETH will witness exponential growth at some point; or will tumble to adjust to the market demands.
First, the network behind ETH is evolving, to a destination described to have better scalability and efficiency. The shift to the new technology is a step to curb existing users distraught by instability, issues in executing smart contracts, and higher gas fees. However, as the destination is yet to prove itself, ETH remains on shakier ground than Bitcoin.
Governments have taken a keen interest in Cryptocurrency, prompting markets to prepare for regulations that will tackle various issues in the crypto domain. While government-backed controls are good, how the markets react to them determines whether ETH will have a positive run this year or not.
Bitcoin has a stronghold on the crypto markets, as in the past, it has shaped price charts for other cryptocurrencies. It might influence the potential growth of ETH this year.
Away from the melancholy, ETH might break $4000 this year, especially if it continues to pick momentum, as seen in the last weeks of March. However, this will depend on whether an upturn will come in the year, as it did in 2021.
Further, if a transition to layer-2 lives up to its billing, ETH might hit even higher figures at the end of the year.
Conclusion
ETH might hit over $4K, but this depends on whether it can hold against the headwinds plaguing economies right now. COVID-19 is one issue to worry about, as until now, most countries are cautious of new waves. Inflation and more scrutiny from governments are other avenues investors will watch as the year unfolds, but a recent momentum in cryptocurrency assets might see it finish at a high later in the year.
