There is a big change coming to Ethereum. Later this year, it will switch from Proof-of-Work to Proof-of-Stake, prompting worries about whether it will soar in price, or sink like a stone.
To help answer these questions, Finder.com asked a panel of 33 fintech, cryptocurrency, and NFT specialists what will happen to Ethereum this year.
Their average prediction can be found at the bottom of this article.
Bilal Hammoud, CEO of NDAX, was one of the bullish panelists, predicting ETH will reach $10,000 by the end of 2022. He believes scarcity will drive increased value.
"Ethereum's latest upgrade turned into a deflationary asset,” he said. “Proof-of-Stake will further lock up ETH for staking rewards, which in theory should influence the price to go up as supply decreases, while demand increases."
Daniel Polotsky, the founder of CoinFlip, gave one of the lowest predictions and said ETH would stay at around $4,000 by the end of 2022 - the same level at which it closed out last year.
He said: "Ethereum has a lot of upsides; it is the blockchain with the most developers, the most usability, and the most total value locked by far. Proof-of-stake and sharding will likely make transactions faster and cheaper over time, but the immediate value will be seen in layer-two solutions like Polygon that make the current network more scalable.
“As Web 3.0 continues to grow and mature, Ethereum is poised to become the most robust digital ecosystem on earth. However, plenty of competitors are attempting to eat its lunch, so Ethereum must continue to grow and not rest on its laurels; many of history's first-movers in new industries were swallowed by their newer competitors.”
There was a lot of disagreement among the panel. Kate Baucherel, an emerging technology consultant at Galia Digital, claimed ETH could reach a value of $25,000 by 2025, which is quite different from the $3,000 prediction of Desmond Marshall, managing director at Rouge International and Rouge Ventures,
John Stefanidis, the CEO of Balthazar provided one of the most bullish predictions for the future of Ether.
"ETH will increase as it's the core driver (and most reliable chain) for most crypto solutions,” he said. “Over the next few years though we will see other cheaper, faster protocols seeing a high uptake. This could take 5-10 years though."
The overall attitude to Ether was strong, with 80% making a neutral to positive forecast for its future. More than half (52%) of the panel think now is the time to buy ETH, with 30% saying investors should hodl and 19% suggesting it's a “good time to get out”.
So what about Proof-of-Stake? The panel said it will have a positive impact on the price, with 78.6% predicting the change will improve its value.
Tegan Kline, co-founder of Edge & Node, said: "Ethereum will become the largest POS blockchain."
Martin Froehler, CEO of Morpher, also thinks the move will boost demand.
"The move to proof-of-stake, DeFi, NFTs, and Ethereum's low inflation rate combined with huge network growth rates will lead to higher demand, and thus higher prices for Ether,” he said.
Vanessa Harris, chief product officer at Permission, was bearish and said she does not believe the move will solve ETH's issues.
"The move to Proof of Stake is unlikely to solve Ethereum's scalability challenges though, and we should look to L2s and side chains to support ETH scalability,” she warned. “Polygon, in particular, is positioned well to support the growth in Ethereum, and I believe will accrue much of the value. In the short term, the market is Ethereum's to lose, but investors should carefully watch the competition from 3rd generation smart contract platforms. Avalanche, Terra, and Elrond all have high scale platforms with active dapp development and will vie for Ethereum's user base."
When averaged, the panel predicted that Ethereum will reach $10,810 by 2025 and $26,338 by 2030.
They said Ether will peak at $7,609 in 2022 – roughly 102% higher than its price at the beginning of the year.
However, in October 2021, the same panel was asked for their forecasts - and got it wrong. They said Ether would hit $5,144 by the close of 2021, before surging to $15,364 by the end of 2025 and $50,788 by 2030. However, at the time of the January 2022 report, ETH is sitting at just $3,004 after a reasonably good month in which it rose from just under $2,700 to a high of $3,241.
Perhaps with this in mind, the panel’s average predictions were “dialed back significantly” and their positive attitude dampened after crypto was “heavily affected by increasingly tightening international regulations and tumbling current values in early 2022”.
