There is a veil of mystery when it comes to Ethereum. This is mainly because there are hundreds of uncertain speculations on whether the bubble will burst or whether the Ethereum is a new tech revolution.
One thing is sure – Ethereum has reached a “stable” period at the moment after a crazy rollercoaster ride of the ETH to USD value. It may seem at first that its value is still dropping – but it is the long-term analysis that defines Ethereum as stable.
Let’s take a look at the history of Ethereum and analyze its value over time.
Ethereum came after Bitcoin with a much greater idea. Bitcoin was primarily made to be a type of currency while Ethereum had plans to simply decentralize everything that can be decentralized. In other words, it is not just a matter of economy anymore – it is the matter of technology and overall progress of humanity.
It is a common misconception that Ethereum is a cryptocurrency. It does have a crypto of its own called Ether, but as a project, Ethereum is actually open-source software which is based primarily on the blockchain technology.
Two words pop up near Ethereum – smart contracts and altcoins. In essence, smart contracts are just computer-regulated contracts which are executed once both sides meet the conditions. It’s simple – apply it to the blockchain and you’ll really have something unique.
Ethereum Price History
When this cryptocurrency started, its value was barely fluctuating around $15 for more than a year. Mid-March 2017 was the time when the value started increasing drastically. This was a perfect moment to create something called Enterprise Ethereum Alliance (EEA), which paved the way for further value increase.
The all-time high price of Ethereum happened in mid-January 2018 when it reached the price of $1,417. There were several reasons for the sudden jump in prices, such as JP Morgan and Microsoft announcing building Ethereum-based projects and joining EEA.
The price of Ethereum had not gone over $400 before it started peaking towards its all-time high. However, the period between end-January and the beginning of April 2018 marked a sharp decline, which brought the value down to approximately $370.
Several factors influenced this, but it is mainly due to the ICO frauds. As previously mentioned, Ethereum is a basis on which many ICOs are created. It was a perfect unregulated way for some people to make a scam ICO and get away with it. The Securities and Exchange Commission (SEC) announced that the heavy investigation of the ICOs would continue, which further resulted in a price drop.
Let’s now take a look at a more recent history of Ethereum. It started going up in April only to reach roughly $760 in mid-May 2018, after which it continued declining. So what makes Ethereum a “stable investment”?
Ethereum in the Future
No future is certain at the moment when it comes to cryptocurrencies as many factors could impact their stability and even completely shut them down. However, Ethereum is really unlikely to live up to such a destiny.
If you consider Bitcoin a “digital gold”, then Ethereum should be considered “digital oil”. As previously mentioned, Bitcoin is marketed as a cryptocurrency – which is observed as a currency in the eyes of governments. On the other hand, Ethereum is a network on which other projects could be built and which already attracted some of the big companies. Therefore, it is not a currency per se, although it is a de facto cryptocurrency.
To put it simply – Ethereum has a real practical use, and it can be applied for further innovations not only in finance and technology but in other industries as well. This builds a firm basis for trusting that Ethereum is really a #2 crypto at the moment, although Bitcoin Cash is in front of it when it comes to the current value. In fact, certain Ethereum enthusiasts are so sure that Ethereum will take the leading role that they even named that event the “Flippening”. Nobody can guarantee whether such an event will happen, but it is likely that Ethereum will remain in the top five cryptos.
Another thing that stabilizes Ethereum is the so-called “Proof of Stake transition”. If you are a cryptocurrency enthusiast, you probably already know something about the Proof of Work protocol which is utilized by Bitcoin. So what exactly is Proof of Stake?
People who bought Ether and hold it in the stake wallets are known as the stakers. They will have a function similar to those of miners – to review and verify the transactions that happen on the Ethereum network. This is considered a step forward when compared to Bitcoin miners as no expensive equipment will be involved, and the transaction speed should be much faster.
Yes, Ethereum is currently in a free fall for the short period of time. However, when you take a look at the big picture, too much is currently being worked on for it to just crash.
In other words, many big companies are already planning their future based on Ethereum, and as soon as it reaches the popularity of Bitcoin, the stability will become even better. This is the main reason why Ethereum is seen as a “stable investment” – it has practical use that does not solely depend on speculation and public opinion, which is the case with many other cryptocurrencies.
Nevertheless, no sharp conclusions can be drawn due to the fact that the technology called blockchain and cryptocurrency are still in infancy. What we are required to do is keep updating ourselves on the latest news in this industry and research every step before we take it.