In Thursday morning trading in Asia, Ethereum price hit a fresh peak of $1,700 marking an 8% gain on the day. ETH is now 17% higher than its previous all-time high three years ago and could easily go further if the momentum continues.
This has positioned the asset firmly above its previous and 2018 high of $1,450 as it moves closer to the $2,000 level. Since the start of the year, the price of ETH has jumped 130%. In comparison, Bitcoin only made 30% over the same period.
At press time, Ethereum has pulled back slightly and is trading at $1,665 according to Binance. The momentum is likely to be driven by Ethereum futures which will debut on the Chicago Mercantile Exchange on February 8.
Ethereum to $20,000?
As with any crypto asset surging to a new all-time high, long-term price predictions are starting to emerge and there is a very big one from economist and Global Macro Investor CEO Raoul Pal. Investment strategists see big things for Ethereum with a bold $20,000 price prediction;
$20K may be a bit on the optimistic side but ETH price could easily hit $5k when ETH 2.0 scaling launches with Phase 1 of the Serenity upgrade.
At current prices, approximately $4.9 billion ETH is currently locked in Beacon Chain contracts, immobile for at least a year. There is nearly 3 million ETH staked right now which will not be available to investors until Phase 1.5 combines the two blockchains.
Worsening Gas Crisis
Scaling has become a major thorn in the side of the world’s largest smart contract network buckling under current pressure. Ethereum transaction prices have soared to a high of nearly $20.
This essentially makes DeFi microtransactions unsustainable as moving anything less than $1,000 in ERC-20 tokens will sting. Industry expert Anthony Sassano commented on the surge in DEX volume for ETH which is adding to demand on the network;
“The volume of decentralized exchanges on Ethereum was $63 billion in January – surpassing the September 2022 high of $29 billion.”
DeFi farmers are currently turning to Layer 2 exchanges like Loopring or alternative chains like Flamingo Finance NEO and Binance Smart Chain, both of which have seen volume spikes recently.