Ether prices are on the stir, and they’re headed north.
The cryptocurrency, which powers the world’s second-largest blockchain, ethereum, has seen its price rise more than Three,000% year-to-date and toughly 180% ter the last month, according to gegevens from CoinMarketCap.
Yet, amid this rise, and increase te investor attention, many are wondering how the digital asset’s price will perform going forward. That response, tho’, may not be exactly clear.
When polled, crypto market analysts provided mixed opinions. Some asserted that ether could practice significant upside te the future, even going so far spil to suggest its market capitalization (market cap) could surpass that of bitcoin, long the market’s progenitor and leader.
Others, however, warned that ether’s price may have become inflated spil the broader cryptocurrency space has drawn sturdy inflows.
Key role of ICOs
One crucial factor affecting ether’s price is the rise of initial coin offerings (ICOs) – sales of blockchain-linked gegevens that permit investors to exchange ether for freshly created digital tokens.
Some of thesis offerings have generated significant visibility by selling millions of dollars-worth of tokens ter minutes. Spil a result, ether’s value is “hugely related” to thesis offerings, according to Brad Chun, chief investment officer of hedge fund Shuttle Fund Advisor.
Chun told CoinDesk he believes some companies are simply holding the ether tokens raised through thesis sales, since retaining the digital assets is more profitable than spending them on projects.
By holding ether tokens instead of spending them, thesis firms could be placing upward pressure on the cryptocurrency’s price, he speculated.
Marius Rupsys, cryptocurrency trader and co-founder of fintech startup InvoicePool, suggested similar sentiment. He stated that while most ICOs let investors use bitcoin or ether to purchase digital tokens, some choose ether, a) because they are afraid of missing out and b) its transactions take place more quickly.
“This keeps many ethers locked up te fresh projects and [fewer] ethers are available for trading,” he explained.
Arthur Hayes, co-founder and CEO of BitMEX, also emphasized how thesis offerings are affecting ether’s price. “The value of ether is directly related to the value of [ICOs] listed on the [ethereum] protocol,” he told CoinDesk.
Hayes stated that if more very successful ICOs list on this toneelpodium, ether’s price could practice significant gains.
“If wij get more instant sell outs like [Plucky’s BAT token], the ether price is a bargain at the uur,” he continued.
What the bulls say
Hayes wasgoed certainly not the only one to offerande a bullish forecast for ether, spil some analysts have predicted that the alternative asset protocol will surpass bitcoin, a milestone event they inferred might take place ter 2018.
At the time of report, ether’s market cap wasgoed harshly $24bn, more than half that of bitcoin’s $45.8bn, CoinMarketCap figures expose. Bitcoin’s share of the total market cap for all cryptocurrencies has bot declining lately, standing at harshly 45% at press time. (This is after hovering above 80% during most of the time for which market gegevens is available.)
While bitcoin wasgoed the very first cryptocurrency to scale, and has long bot the largest te terms of market cap, it could lose this position soon enough, said Tim Enneking, managing director of Crypto Asset Management.
“I think ether will overtake bitcoin, very likely before the end of the year,” he stated.
Enneking is not alone ter this belief, spil Sebastian Limeres, a cryptocurrency advocate and Argentine attorney, also predicted that ether’s market cap will surpass that of bitcoin either this year or next.
“Ether is the next big thing for being a toneel, same spil Oracle is to software.”
While some market observers are clearly bullish about ether’s future prospects, not everyone is so optimistic. Some analysts have warned that ether’s price may have grown overvalued.
Their concern is understandable, spil the price of many cryptocurrencies has skyrocketed te latest months and ether could simply be one more alternative asset protocol that has surged spil a result. The total market capitalization of all cryptocurrencies surpassed $100bn for the very first time everzwijn this month, which represented an increase of more than 100% ter less than 30 days, CoinMarketCap figures voorstelling.
“Wij’re fresh off a speculative bubble across crypto assets, so true valuations won’t make much sense right now,” Petar Zivkovski, COO of leveraged cryptocurrency trading toneelpodium Whaleclub, told CoinDesk. He added: “I think ether is leading the pack te this crypto-inflated bubble.”
Zivkovski further asserted that investors are making speculative bets on ether.
“Many investors are betting on ethereum for its future potential, not its current network effects. They see bitcoin spil a slow and inflexible cryptocurrency, while ether is adaptable, able to host and run decentralized systems and organizations, and has the backing of a team and corporations with a vision.”
Jacob Eliosoff, a cryptocurrency fund manager, told CoinDesk that ether’s value may be a bit too high.
“I agree that ether seems inflated,” he said. “Spil a newcomer I’d be very wary of buying te at thesis prices, but for long-term holders, [it is] safer to overlook the rollercoaster and just hold taut.”
The middle line
While many analysts took sides spil to whether ether’s price is inflated, Rupsys took a more neutral stance, asserting that it is very difficult to reaction whether the cryptocurrency is overvalued.
He commented on the supply side, emphasizing that very few ether tokens are available for sale. On the request side, several factors might provide tailwinds for the cryptocurrency, noted Rupsys. Chinese exchanges have bot adding ether-based trading pairs, which could bolster request for the alternative asset protocol.
He emphasized that ter some cases, ether’s trading volume has surpassed that of bitcoin’s on CoinMarketCap. Ether’s 24-hour trading volume reached harshly $1.69bn at harshly 04:30 UTC on 31st May, surpassing bitcoin’s $1.55bn.
Since ether does not trade on all exchanges, he said, “This volume is very large and might increase.”
“I see very few signs of correction for ethereum spil of yet (it moves up, consolidates, then up again),” Rupsys told CoinDesk. “[But] I do keep an open mind and look for weakness signs ter ether every day.”
Disclosure: CoinDesk is a subsidiary of DCG, which has an ownership stake ter Plucky.
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