Key Ethereum Takeaways
- Asset management firm executive sees Ethereum at $10,000 by the end of the year.
- As DeFi expands, the demand for the platform continues to rise.
- The London fork created a supply squeeze, that propells the token value.
- Analytical metrics also take the bullish side.
YEREVAN (CoinChapter.com) – Ethereum (ETH), the second-largest cryptocurrency and the most comprehensive DeFi platform, crossed the psychological resistance level of $3,500 and stood at $3,901 ahead of the London session Tuesday.
However, one expert set the bar way higher and predicted a $10,000-future for the alpha altcoin by the end of the year.
Could ETH hit $10,000?
Megan Kaspar, the co-founder, and director of Magnetic Capital asset management firm, voiced her opinion on the future price of ETH in a recent interview. She once again backed the $10,000 price target that she set back in January 2021.
The executive pointed out the increased demand for various DeFi services on the crypto market. She also asserted that the state of the US economy spurred the increase in cryptocurrency investments.
“When we look at it from two dimensions: supply and demand, investors are still using crypto as a tool to hedge against inflation, as the US may or may not be continuing to print infinity amount of US dollars. […] Ethereum is becoming a deflationary asset”.
stated Ms. Kaspar
Also read: Crypto market maintains strong footing as US inflation rises another 0.5% in July.
Factors that back up the bullish prediction
As Ethereum underwent the much-anticipated London hard fork upgrade on August 5, it adopted a token-burning mechanism that reduces the supply of ETH coins. As of the moment, 222,430.6 ETH has been burned, gradually creating a supply squeeze.
The noted supply shortage could lead to price increase based on scarcity. It is one of the factors that Ms. Kaspar considered in her prediction.
“Towards the end of the year, we’ll have about a million worth of ETH coming out of supply. That will initiate it becoming a deflationary asset. That’s why the 8,000-10,000 price call is very much a possibility”.
asserted the Magnetic Director
Another significant factor is the growing demand for DeFi services such as NFTs (non-fungible tokens). According to the executive, Ethereum saw $900 million worth of NFT sales in August alone. However, she commented that the NTF market is still young and will surely expand as its “real-world applications come to life.”
Also read: Mass NFT minting on CyberKongz burns $4M worth ETH in 5 hours
Favorable ETH metrics
Aside from opinions, there is also some analytical evidence to suggest a continuation of the uptrend. Glassnode, a crypto-analytical platform, reported a rapid increase in ETH coins locked in deposit contracts.
In detail, after the shift to proof-of-stake consensus, the blockchain requires validators to verify transactions instead of miners. Ethereum holders who wish to become validators have to stake their ETH coins by depositing them in designated deposit contracts. Any holder with 32ETH or more can become a validator and earn rewards.
Fast forward, the amount of Ethereum in deposit contracts has skyrocketed after the fork. The number was just under $30 billion on September 3, and the number is growing in sync with the price itself.
The price action was moving towards the all-time high of $4,380, but the rally halted for the past four days. However, ETH still traded high above its 20-day exponential moving average after taking off a new leg up on August 31.
Strong fundamentals, alongside metrics analysis and opinions of experts in the Cryptoverse, suggest that Ethereum is poised for a strong continuation rally. If Magnetic’s Megan Kaspar is right, it might even hit $10,000 by the end of the year.
Also read: Ethereum (ETH) jumps 10% amid DeFi, NFT activity surge, and on-chain developments.
