## Ethereum price prediction for 2021-2025

The next four years will likely be positive for crypto prices, and ETH is leading the altcoin pack. With its break above the $280 level in the middle of 2020, ETH smashed out of its post-bear market trading range and is probably going to much higher levels over the next few years. It is easy to see that ETH prices engaged in a long bottoming process that began in late 2018 and lasted until mid-2020. With the break above$300 on massive volume, ETH is signaling that a new bull market is probably here. Given the backdrop of easy central bank money and government spending programs, ETH prices may be able to rise to levels that are difficult to imagine at the moment.

One of the most important factors that are driving the phase shift in the crypto markets is the adoption as a stand-alone investment by institutional investors. While Bitcoin has traditionally been the favorite of crypto investors, large investors from the established markets don't have the same convictions concerning decentralization.

Instead, these investors are likely to favor a growth model, and also reward platforms that offer the ability to innovate. In short, ETH is the perfect platform for investors that want both the ability to hold a token as money and benefit from the rising use of the platform by third-party developers with new ideas.

Given the interest in Ethereum's blockchain by developers and investors, it isn't hard to see a scenario where ETH prices climb to between $1,000 and$10,000 over the next four years. One of the biggest unknowns going forward is central bank policy, which has been very difficult to predict over the past decade, especially in 2020.

As ETH is becoming a cash-like reserve asset for established investors, it is highly likely that 'fresh money' that would have flowed into equities or debt may now find a home in long-term ETH holdings. While ETH is gaining in value, its total capitalization will well below $100 billion USD. With the current float of ETH in the markets, a$6,000 price would imply a capitalization of around $650 billion, which is still low when compared to a single company like Apple or Alphabet. Of course, the potential uses for ETH's blockchain are far wider than either of these two companies' products or services. Given ETH's relatively small capitalization at the moment, the potential for an explosive rise in price at any time is very real. Mainstream payment platforms are opening the door to crypto use, and the technology to use tokens like ETH at a retail level is in place. It is very difficult to predict how high ETH prices will go in the coming years, but the direction is certainly up. ## Other Factors That Could Affect The Future of ETH The Ethereum blockchain is on the cusp of making some major changes. The ETH 2.0 project is now fully funded and will begin work on a project that is designed to make a shift from Proof-of-Work (PoW) to Proof-of-Stake (PoS). When Ethereum was designed, it used the same way to validate blocks that Bitcoin uses, which is PoW. A PoW system has some major drawbacks, which is what the PoS is designed to address. No one really knows what will happen as these upgrades are introduced, and they will include a net gain to the amount of ETH in the marketplace. The amount of ETH that will be added is at least 4 million tokens, at least according to new estimates. At its most basic level, this upgrade to ETH 2.0 is a gamble, but if it is successful, ETH will be the most capable public blockchain there is. Some of the most important problems that a PoS system addresses are the ability of bad actors to mount a 51% attack and the huge amount of energy that is needed to operate a PoW blockchain. There is a lot more, but given the relative infancy of these programs, it is almost impossible to know how they will be implemented, or what effects they may have. From an investor's point of view, PoS is a much better system. A PoS system creates many more opportunities for passive income, as the holding of a token becomes inherently valuable. Staking on a PoS platform can be thought of as making an interest-bearing deposit, as large stakers are able to earn rewards via their staked tokens. Smaller stakers who don't participate directly in the validation process can still earn by entering into fixed-payment smart contracts with a validator, which could be a more or less automatic process for any ETH holder that was interested. Overall, ETH 2.0 could be a massive opportunity for digital investors, although no one knows how it will unfold in the coming years. ## The bottom line: Is ETH a good investment in 2021? The crypto markets remain as volatile as always. Although the Ethereum price prediction is looking positive for a year from now, the path to those higher prices is probably going to be full of fast moves down. Bull markets tend to have quick corrections and as ETH is likely entering another bull run, sharp moves lower will most likely enter the markets every so often. ETH is one of the leading tokens globally, and there is no doubt that institutional investors see it as a similar asset to Bitcoin. Given the fact that established investors are entering the digital asset space in higher numbers, ETH should have buying support over the next few years. Should you buy ETH today? Probably, yes. But keep in mind that the crypto markets move more like the commodity markets, and you will probably want to use an accumulation strategy that spreads your buying capital out over months or years. From a technical standpoint, ETH looks like an incredible buy. The token has put in a long and well-tested bottom, which it broke out of decisively. With the high volume move above$300 in the summer of 2020, ETH has opened up the door to much higher prices.

Keep in mind the initial rise in ETH prices to around $475 resulted in a fall to the$320 level, so buying a position in stages makes more sense than making a one-off buy in the market.

On the fundamental side, the introduction of ETH 2.0 in the coming years is encouraging. Unlike Bitcoin, ETH could become an asset with a naturally occurring rate of return due to its emerging PoS model. This would make it more attractive to many investors who want to generate a risk-free passive income, although this system is still years away from being a reality.

The biggest worry with ETH is that the price may fall suddenly, which makes it a poor choice for anyone that is looking for a cash equivalent.

If you do want to keep a substantial amount of value in the token, it would be a good idea to hedge whatever amount of value you need to have on an on-demand basis, so that short term down moves don't create issues for your cash-equivalents position. If Ethereum is not for you then take a look through our top picks for cryptocurrency investments in 2021 where you can find out about a range of other interesting projects.

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