The Ethereum Ecosystem
The Ethereum blockchain ecosystem serves as “fuel” for investors’ projects. One fundamental feature of the Ether is an insurance policy against its collapse. The red line (below which the cost of Ethereum cannot drop) is a major investment that will always support demand at a sustainable level. Therefore, the most important factor in the existence and development of the Ethereum ecosystem is the popularity and relevance of its blockchain for large investors and the implementation of their own projects. Let’s conduct a deep Ethereum analysis to understand more.
From the moment of its appearance, Bitcoin number two — namely, Ethereum — has been constantly compared by the crypto community with the first cryptocurrency in the world. It is the closest Bitcoin competitor, according to rating estimates. However, it has a completely different functional purpose. BTC is a virtual currency: a decentralized alternative to traditional money and even more closer to value storages like gold or precious stones and metals. On the other hand, the Ether is a platform or basic technology for the formation of services based on the blockchain in a cloud-like manner, as well as the implementation of projects by means of smart contracts.
The Ethereum price technical analysis shows that despite its young age, Ether has its own story, and it is a tragic one. Suffice it to recall two cases of hacker attacks, carried out within an interval of more than a year: first in 2016, then in 2017. However, the Ethereum price analysis shows that this did not prevent further growth of ETH, but contributed to its wider popularization, as these issues attest:
- First of all, Ethereum attracted the attention of potential users; in particular those who weren’t closely familiar with the crypto-industry world (nothing promotes advertising like a scandal.)
- Second, this led to the appearance of Ethereum Classic, a daughter cryptocurrency.
- Third, the hacker invasion contributed to the identification, (and hence the elimination) of the vulnerabilities of the system, after which time Ethereum became more secure. True, it was necessary to incur fewer blows to its reputation, as financial losses occurred due to the rollback of the transaction history.
Therefore, the Ethereum price technical analysis shows that the Ether is not just a means of payment or a digital asset with a certain market value, as speculators on the crypto market mistakenly believe.
Ethereum Price Analysis
In 2018, no one among the experts predicted a sharp drop in Ethereum. The core reason for this was the legal tightening of the ICO market that led to sharp selling of Ether by scam ICOs or projects that couldn’t reach their goals. A new ICO required a smaller amount of Ether fees due to introduced lock-up feature, which extended up to one year. Still, everyone was drawn to the fact that there would be an almost linear increase in Ether price. However, any cryptocurrency is characterized by fluctuation. All of this is affected by a speculative user audience interested in such fluctuations. They catch moments of minimum rates for buying and the maximum rates for sale.
This speculative group of people has organized itself in order to conduct mass dumping sabotage in the market. This might have been done in order to provoke instability in the exchange rate. It must be mentioned that quite a large number of users are engaged in provocative activities like these that decrease crypto rates, including the Ether.
The Ethereum price analysis tells us that in past trades, Ethereum fell by $27 to $191, leveling out most of the growth over the past trading days. The rate of this cryptocurrency is still very attractive for long-term investments, since it is near its low for the year.
Ethereum Rate-Increase Indication Markers
Despite the curbing factors of the general depression, which is now progressing to the crypto industry, as far as the behavior of ETH is concerned, there are good prerequisites for a recovery of this digital currency. Above all, this is manifested:
- in the stable loyalty and trust of large investors and banks as well as the interest of exchanges, including new exchanges and trading pairs in playlists with the participation of the Ethereum
- in the high operational capabilities of the ecosystem and the implementation of the Ethereum blockchain system in smart projects, which is more valuable than the exchange value of this asset
- in a bunch of projects the Ethereum team is involved in (Plasma, Plasma Cash, Raiden, Casper, and zk-SNARKs implementation) that are solving scalability issues and the ability to use blockchain for any business or personal purpose
- in a high degree of security, which was achieved after the identification of vulnerabilities in the process of hacker attacks
- in the recognition of Ethereum and the trust of ordinary users and investors.
As we can see from this Ethereum analysis, all of these markers provide a constant demand for ETH. This leads to positive dynamics in the exchange rate.
Possible Risks of Investing in Ethereum
The Ethereum chart analysis says that any investment is risky, regardless of the area where the money is contributed. There are no guarantees of any investment profitability. If we look at the Ethereum analysis of its charts in terms of the historical perspective of its existence, not paying attention to the ups and downs that accompany any cryptocurrency, we can draw the following conclusions:
- During its life cycle, the Ether is both more accurate and more widespread.
- Its rate is more attractive, both for large traders and small speculators. On the one hand, it is constantly more or less stable as it grows, and even as it gradually falls. On the other, this up/down stability leads to a certain predictability in its behavior. This allows both types of players to choose these or other trading strategies, in order to receive constant income from transactions.
- Ethereum is resolving scalability issues, and one solution – Casper or PoS consensus – will lead to a decrease in Gas fees and limit demand on Ether. It will make Ethereum faster and more reliable, which will push demand. It is impossible to predict which of these trends will be stronger.
- The Ether is more protected from external factors affecting its rate, such as media hype, fake news, and unfavorable news about the crypto industry.
Basing on the Ethereum price analysis, we can say that the nature of Ethereum itself reflects a tendency to inflation, due to the fact that this system has no restrictions on the issue of tokens. However, the trust of the community and long-term stability are a natural defense against inflation.
Ethereum Classic Technical Analysis
The Ethereum Classic ecosystem has the ability to make everyone satisfied: speculators (with high volatility), investors (with the possibility of high incomes), and miners (by the fact that they can leave collective farms, which are pools, and earn independently).
This crypto asset is promising on its own merits, which are principled. Basing on the Ethereum price technical analysis, we made a list of its benefits, which includes:
- constancy: consistent fulfillment of a commitment to decentralization and financial democracy
- reliability: a high degree of protection of the ecosystem, which has proven to be effective in repelling cyber-attacks and hacking. There has been no successful attempt to overcome the security system.
- demand: the volume of trading with this crypto asset was slightly higher than the volume of the trade involving the top cryptocurrencies, including Ethereum
- stability: as a result of adherence to the principle of decentralization, which lies at the heart of the blockchain. This principle is followed by the creators of ETC as well as by large investors.
- universality: The Ethereum Classic project has prospects for any field of activity through the mother platform, namely Ethereum, and its developments (smart contracts).
The new Ethereum Classic ecosystem has preserved all the advantages of Ethereum without carrying out a fork and by eliminating external interventions in the blockchain, which is the cornerstone of decentralization. Moreover, the ETC project started so successfully that it was almost immediately included in the list of the best new projects, which subsequently facilitated the entry of ETC into trading in exchanges like Bittrex and Kraken.
This is not surprising since from the very start of trade, ETC sprinted for 250 percent. This could not escape the attention of competitors, and they stretched their hands toward Ethereum Classic. The most perspicacious speculators were left with good incomes when they realized that the deal quickly changed the ETH tokens into brand-new ETCs. They received a three-to-four-fold increase in deposits over just a couple of days. Look at this Ethereum chart analysis:
The developers of Ethereum Classic were lucky, and not only because their project turned out to be timely. It was based upon the correct ideology, which we will describe below. The Ethereum Classic market capitalization now equals around one billion dollars.
The ideology of an ecosystem does not have a clear structure as such, it is based on individual ideas and principles that guide developers. This can be defined as follows:
- Belief in decentralized platforms, which should be freely available to all without restriction. In addition, they must be protected from external interference and censorship.
- Principles. The surrender of principled positions led to the DAO fiasco. In addition, most of the Ethereum Foundation responded to this challenge inadequately and attempted to save DAO with another hard fork. This led to the further distortion of Ethereum’s basic principles, contrary to the opinion of the opposition minority.
- Mission. The mission of the Ethereum Classic ecosystem is the preservation of the Ethereum blockchain in its original form. Only original ideas have prospects for further development, even if its followers, who are in the minority, continue to implement it away from the original platform.
Where Can You Buy Ethereum Classic?
Opportunities for Ether purchase are provided by many exchanges, but the choice should be independent of the popularity of a particular resource. Service security and purchase profitability are both decisive factors. You need to choose exchanges that provide exchange services for one cryptocurrency for another as well as servants for purchasing ETC tokens for ordinary money. These criteria can also be used when choosing wallets for storage: mobile hardware or online wallets, depending upon your preferences.
Ethereum Price Prediction
Any cryptocurrency is subject to unpredictable volatility or fluctuations: up to half of its value in one direction or another. Also, the rate of crypto assets in general, and the Ether in particular, exert pressure. This can be external voltage in the form of negative events in the crypto industry, economics, and politics, as well as internal changes in the form of updates to the system (hard forks, changes in user audience, etc.).
Basing on the Ethereum technical analysis, we can say that the cost of an Ether depends on a range of factors and conditions, including:
- The current and future number of tokens. There are about 100 million of them now: to be precise, 96 million. There is a natural increase, but developers regulate the circulation of tokens at approximately the same level in order to reduce inflationary burden. Ethereum uses an ongoing inflation model, which means no upper limit on supply. This is also a key advantage in terms of long-term perspective, as it allows limitation of price volatility.
- Updating existing and new/developing applications, mostly utilizing smart contracts on the Ethereum blockchain. First, they are automatically executed; only a smart application needs to be run to realize them. Second, the more applications adapted from the ETH blockchain system, the greater the demand for Ether coins. This means that there is growth in value. Third, in the near future, the number of applications based upon this ecosystem should increase two or three dozen times, which will also play in favor of ETH cost growth.
- Ethereum coins demand growth, which goes in two functional directions in this ecosystem. This is due to the fact that this is a crypto asset, and also the fact that it is a technological tool for creating your own decentralized smart contracts. The second direction is the most valuable, as it is attractive for investment. This is of greatest interest to big business, which does not care about the internal structure of an ecosystem or the particular nuances of a certain blockchain, as it needs ready-made solutions. Ethereum developers offer these solutions in their updates and hard forks.
- Casper, Plasma, Plasma Cash, Raiden, and zk-SNARKs are in the implementation and testing phases. These technologies will allow Ethereum to become more scalable, flexible, and secure network in comparison with others. Ethereum will not compete with Bitcoin in security terms, as its flexibility causes Ethereum many issues. That is, you can make a security vulnerability inside a Smart Contract (not the blockchain itself), and it is hard to believe that it will be faster than IOTA’s tangle. But the scalability of Ethereum will be enough to replace a bunch of payment systems, applications, and even some cloud providers.
One of the most important determining factors of Ethereum price is capitalization, which is a success indicator for any cryptocurrency. This statement is valid because the degree of any token’s favorable outcome depends not upon its price at the exchange, but upon the amount of money that investors have put into the project.
If we follow this logic, then, in our opinion, it is quite justified to make forecasts — not in terms of parameters of value, but in terms of the capitalization of criteria. Now, the ETH is in the range of $56.5 billion U.S., but many analysts believe that over the next two years, capitalization of the Ether will exceed a hundred billion, at least. Its price will increase to $2,000by gross standards, and possibly up to $5,000. Then we can make a forecast with exact calculations.
Ethereum’s price fully corresponds to the current dynamics of its capitalization.
The next thing that prevents Ethereum from being on top is the problem with the user consensus. In other words, it is not difficult to create your own Ethereum-based project. It is much harder to reach a user agreement for its implementation. This is a difficult task because of the inevitable differences that arise during the implementation. It would be an excellent solution to create one single cryptocurrency, and set it up according to basic requirements instead of launching numerous different projects. However, as competition within the crypto industry is skyrocketing, developers have probably already found a way to solve scaling and consensus problems.
If we consider the events that accompanied the growth of ETH, then we can distinguish the following:
- The creation of EEA (business alliance) in late February 2017 for the development of projects on the ETH platform. The largest financial institutions decided to participate in this alliance: JP Morgan, UBS, the well-known corporations like Microsoft and Intel. In the alliance statement, it was said that business is not interested in digging into the basics of blockchain; it wants to have ready-made solutions with open codes. If we look at the Ether price charts after this event, we will receive proof of its rapid growth.
- After the September 2017 hacker invasion, in November, the system was updated with the help of a hard fork. This eliminated the consequence of the attack and also made it impossible to carry out such attacks in the future.
- Ethereum allows the creation of side chains at the enterprise scale, like JP Morgan’s Quorum, the former R3 consortium Corda, the Loom network, or pure PoA Ethereum. The creation of side chains for enterprise purposes already brings value, but with Raiden (Ethereum sharding), it will create a new financial/value Internet based upon Ethereum’s infrastructure.
The main engine of the crypto industry is still Bitcoin. It was the achievements of this project that attracted the attention and interest of the crypto community — not only to this cryptocurrency but also to other digital assets. This provoked a rapid growth in its rate, which pulled the costs of the remaining cryptocurrencies. On the other hand, the collapse of Bitcoin had a negative impact on the crypto industry, as many crypto coins also fell in price, including Ethereum.
To put it simply, if Bitcoin grows, then Ethereum will experience more intensive growth dynamics, and if prices for Bitcoin fall, the cost of the Ether will start to fall. Ethereum, though linked by unseen connections with Bitcoin, has its own potential for periodicity in its recovery, stabilization, and depreciation phases.
The demand for virtual money is growing constantly, and possibilities for its application are already being discussed by the heads of leading states. Unlike fiat money, cryptocurrencies have huge growth percentages, and even one investment against a background of sharp increase in the exchange rate can bring huge profits to its owner.
In search engines ranking queries on the topic of cryptocurrency, Ether is in second place, right after Bitcoin. This interest is primarily due to the desire to earn without large investments or the need to obtain economic education and the overall simplicity of the process. If they so desire, anyone can invest a couple of hundred dollars during a sharp drop in the currency, or just buy as much Ether as possible and expect a suitable course of sale.
Many analysts predict a further rise in Ethereum price in the coming years, and for market participants, this means an opportunity to get good money. As we can see on this chart, its price has changed sharply since October 14.
Cryptocurrency resale on exchange services brings good profit to traders. Rapid ups and downs in the currency may be due to activity in the market of the main capital custodians. A large number of asset sales inevitably leads to a drop in value, but stabilization and further growth can occur quite quickly.
At the moment, Ethereum is focusing on developing its great features: token creation, writing decentralized applications, etc. After conducting a deep Ethereum analysis, we can see that for anyone who wishes to invest in the Ether market, its price chart will be of paramount importance. Even small amounts invested in cryptocurrency systems several years ago brought huge profits. Due to their novelty and rapid development, blockchain technologies are being introduced to many aspects of our lives — for example, payment systems. This introduction creates interest in virtual-fund services by large campaigns, which could easily take the whole market, as happened with Bitcoin.
For more information, please contact the Applicature team.