Can etherium hit 10 000 per coin? Is that even possible? When could this happen? Well, that's, exactly what i'm talking about in this video today, i'm, going to analyze the current ethereum price and look at the factors that could send it to 10 000.
As always, i must fully disclose that. Sadly, i am not a financial advisor. I do not warrant this as financial advice. I'm, a blockchain developer, who works the ethereum protocol on a daily basis and also an ethereum investor, because i see what happens in this space and i firmly believe in this technology and the asset itself for the long run.
So this is just my opinion. I'm gonna lay my analysis out there and you can make your own decision so before we get into that. If you're new around here, hey i'm gregory and on this channel i turn you into a blockchain master.
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Then, head on over to dappydiversity.com forward slash bootcamp to get started today, so let's, look at what could cause ethereum or ether to hit ten thousand dollars per coin. So essentially, we're, going to answer three big questions: the what the when and the why so we'll start off with the what you know what has to happen for each coin to be worth ten thousand dollars - and this is Called the unit price, you know ten thousand dollars per coin and it's important to understand how this functions.
When you're evaluating cryptocurrencies because you might be tempted to say well, you know bitcoin has been worth twenty thousand dollars. So ethereum should easily be worth half that right, not so fast.
So this is a really common mistake. When you compare unit prices of cryptocurrencies that have different supplies, see there will only ever be 21 million bitcoins in existence and right now there's over 113 million ether out there.
So you can't just look at the unit price by itself without considering the market cap of the cryptocurrency. So let me explain if you're, trying to figure out if a cryptocurrency can actually reach a certain price per unit.
So 10, 000 per ether. You have to think about the total market cap of that cryptocurrency and see if it can actually get that big, and so in order to do that, we need to figure out what east's. Market cap would be if the unit price was ten thousand dollars, so we can figure that out with a simple formula, so the market cap is basically the unit price multiplied by the total supply, all right, so the total plot supply of ether at the time record.
This video again is 113 million all right, so we'll just use that for an easy number, and so, if you multiply 113 million times 10 000 all right, then that is a market cap of just over 1.1 trillion dollars.
So, in other words, all the ethan existence has to be worth over 1.1 trillion us dollars. So is that even possible? Well, in order to answer that question, let's, look at the values of other things out there.
Basically, we can ask ourselves like hey what else is worth over a trillion dollars? Well, apple is worth over two trillion dollars and amazon is worth over 1.5 trillion dollars and depending on who, you ask gold's.
Market cap is estimated at around nine trillion dollars, and some of you might be thinking like hey, that's, not really an apples-to-apples comparison. You know you can't, look at ether and try to value it against something like apple or gold, to which i would agree with you and say this is a very rough comparison, because what else can you really compare ether against? What is it? Is it a currency? Is it a commodity? Is it a capital asset? We don '
T really have a good analogy outside of the world of blockchains and cryptocurrency to compare it to so, i think it's good. To have this rough comparison, initially let's. Also look at the total addressable market, because that's.
Another critical measure to determine whether or not eth could hit 10k. So, in order to look at the total addressable market, you have to first ask yourself: what can you do with ether? Well, ethereum holds the potential to create a brand new financial system that competes with our existing financial system.
In many ways you can do things like payments savings and lending and derivatives trading, and for this reason you have to add all these things up to create the total addressable market. That ether can take a part of, and these traditional capital markets are massive.
You know, global debt is 250 trillion, derivatives are 524 trillion and equities are closing in at 90 trillion and so yeah traditional capital markets are indeed massive, and so the total addressable market is trillions and trillions and trillions of dollars.
So if eth can just take like a small fraction of that market, then its market cap could conceivably hit 1.1 trillion dollars, sending the unit price of one ethereum coin to ten thousand dollars. So when could this happen like? How long would it take each to reach a market cap of one point, one trillion dollars and ten thousand dollars per coin? Is it next year, three five ten years so based upon the relatively short span of cryptocurrencies, the prices tend to move in cycles and that they go up for a while and they kind of go down for a while and go up for a while over multiple Years so, if you're trying to answer like when could eath hit 10k, you might want to ask yourself like? Is it gonna be in this cycle? The next cycle? You know the one after that, so let's.
Look at a few different perspectives on this, so i'll. Put a link to this article down in the description below this quantitative analyst thinks that ethereum could hit ten thousand dollars in this market cycle.
The one that we're currently in he says, if eats, continues on in this manner and is in fact one market cycle behind btc. Then we make peak at approximately one thousand percent above the fair value in a few years.
If this happens in say 2023, then this could put a theoretical peak, just shy of a modest 10k per each. So another perspective is from chris burniske and he doesn't exactly think. It's, going to go to 10 000.
This cycle, but he does expect to move towards 5000 and potentially higher. So for me personally, i don't focus too much on the actual time frame for each hitting ten thousand dollars, because i have what's called a low time.
Preference essentially, i'm invested for the long term. You know. I personally think that each price is going to go a lot higher than it currently is, and i don't necessarily care how long it's going to take to do that, but i do expect it to outperform.
You know any other possibility available to me right now and that's, why i hold it for the long term. So, for example, let's, say it takes ten years for ethan hit ten thousand dollars uh from a price of five hundred dollars.
We'll. Do that for easy, math 10 years? That would be a 34.9 annualized return and that's over 10 years. So let's, say it's five years that would be 82 annualized return and one year would be a whopping, 1900 annualized return, and so for me personally, if ether ever hits 10 000 in the next 10 years, then that's probably going to outperform any other passive investment that i would personally put money into right now, okay, so we talked about the what has to happen for each to hit 10k.
You know when this could potentially happen. Now, let's. Talk about the why! Well, ultimately, the price is determined by the supply and the demand okay. So if the price is going to go up, then the demand has to increase faster than new eth is issued or faster than the supply goes up.
In other words, there has to be a lot more buyers for eth at those price levels than sellers of those price levels. So why would the demand go up? What would cause people to want to not sell ether causing the price to increase? Well, they wouldn't, sell it because they're, essentially using it in some way, because east's, utility value is really high.
Basically, you can do a lot of different things with ether, so you could use it as a store of value. So if the price is going up and people want to get that appreciation, then that's utility for them.
They don't want to sell. In that case, this is the most common use case for other cryptocurrencies like bitcoin, but ether can do so much more than that remember. I talked earlier about ether having the potential to create a brand new financial system that competes with the one that we have now and if that vision truly unfolds and there's, so much you can do with eth.
That would cause people to not want to sell it. So we'll get into that part in a second. But let's. Look at the other ways so payments. You know you can pay for things with ether. You can also stake. It so now that ethereum 2.
0 is rolling out it's, moving proof of work to proof of stake, which basically means all the miners on the network are getting replaced by validators who take their ether, their ethereum cryptocurrency and lock it up in their Nodes in order to participate in confirming transactions on the network, so don '
T worry if you don't completely understand what that means. But basically that means there's. A lot of people that are just going to hold on to ether, lock it into their own computer and not sell it because earning them a passive income reward a lot like mining cryptocurrency would, but they're staking it instead, so that's going to lock up a lot of the available supply of eth.
So you know if the exact same number of people demand to buy ether right now, but there's, fewer sellers and that's, going to cause the price to increase right, so staking alone could have an impact on price and also Going back to what i said a second ago, if we do have a new financial system created by ether, that's, powered by dapps smart contracts around the network that create these new financial based applications, then a lot of these things are going to Tie up ether as well to lock eth in as like collateral for loans, each will be used as a reserve asset for stable coins, and it'll also be a desirable asset to just use to pay for transactions in this new financial system.
So let me talk about a few of those things really quickly. So, first and foremost, right now the time to record in this video there's over 1 million each staked into ethereum 2.0 uh. So they can become validators at the east 2.
0 network launch for the beacon chain, all right, so that's. Nearly one percent of all ethan existence so also uh in d5. Right now, this is decentralized finance. This is the beginning of this new financial system that ethereum is trying to create there's, nearly 15 billion dollars of value locked into this right.
This is not all ether right, full disclosure here, but still a lot of value. Okay and this value has grown - you know over 15x in the past year alone, so now eath is definitely being used in a lot of these different applications uh as a reserve asset, you know to use as collateral for loans all that kind of stuff like i Talked about so let's kind of go through a few of these scenarios.
One by one so die is a stable cryptocurrency, whose price hasn't changed. It's, really useful for like global payments, that don't, have you know volatility associated with them? It's. A fully decentralized cryptocurrency and eth is a very big portion of what's.
Backing dye's value, because when you have a stable coin, you have to have some sort of assets. You know backing it up that guarantees value so die. Market cap is over a billion dollars at the time record.
This video so again, ethan is not the only asset backing die, but that gives you an idea of you know its size, okay and also what it's used for so again it's also used, for you know, savings and lending People can use eth as collateral for loans, and, you might say, like hey, why would you want to do that? Well, it's, pretty simple.
There are lots of reasons, but one really common use case is basically to borrow money against your cryptocurrency that you're holding for the long term, because this allows you to use that money without paying taxes from selling it.
So let's say that you, you know held some eth that went up 5x in the price. Well, you could basically borrow your original principal from a defy app, for example, and then you could use that money to go, make more money and then pay back your original loan later.
So you can do that. Applications like compound finance, also ave. These are money. Market accounts all right also uni swap is a decentralized exchange and eth is a very common asset pair on this decentralized exchange and people can earn passive income for parking their eth inside of uni swap, and so, if eth has, you know, big demand, the demand increases Uh, because of all this utility value and the supply doesn't increase, you know much more than, of course the price will go up all right and the supply doesn't increase at a faster rate.
Then, of course, the price will go up now. The other thing to think about is with d5, like i talked about with these stable coins with loans, etc, etc. The effective available supply will go down because people are locking into staking they're locking into these apps, and there'll, be fewer sellers like i was talking about earlier.
If there are more buyers - and there are sellers, then that's, a huge catalyst for a price to increase, and so all these things together could have a huge impact on why eath could reach 10 000, and so, if ethereum does create this brand New financial system that becomes in high demand, then it stands to reason that ether, the underlying asset would also become in high demand, which means that it could conceivably have a market cap of over 1.
1 trillion dollars, which would mean that ethereum could hit 10 000 per Coin, so, in summary, if ethereum is going to hit 10 000 per coin, then the total market cap has to exceed 1.1 trillion dollars. There are lots of things that already have market caps above this amount.
You know tech companies, gold, etc, etc, and, while those aren't perfect analogies, the ethereum network itself has a total addressable market way bigger than this, because it does things like savings loans, derivatives, you know trading, so you can compare it to all the Other markets out there like global debt, derivatives, equities markets and when you add all those up together, then that's.
A really big pie and ether just has to take a really small percentage of that pie in order for its market cap to exceed 1.1 trillion dollars, and if the ethereum network does become, you know the backbone of a brand new global financial system that competes with The system that we have right now, then this is entirely possible and now, of course, as always, there's, no guarantee that this is going to happen.
No one knows for sure if it will, and even if it does, we don ' T really know when, but i'm personally optimistic about ether for the long term and think that it's, going to be a much better investment for me personally than many of the other options that are on the table.
Right now, and for everything that i'm, seeing in this space with all the brand new innovation, all the eth getting locked up for staking an e2.0 in d5 for these savings loans, trading, etc, etc. I'm, seeing a ton of new demand for ether itself, which i think will be a likely.
You know a big catalyst to cause the price to increase. You know we'll, see how high it goes. So i hope you like this video. You know, as always, smash that like button down below and subscribe to this channel, and if you're new around here or hey - maybe you've, been watching this channel for a while already and you're interested in This technology and want to learn how to become a developer, or maybe you're, a developer already.
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Alright, so that's, all i've got and until next time, thanks for listening.
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