In a note to investors, expert David Grider considers possible the rise in the price of Ether to new heights. He estimates that its value could be multiplied by 7 because of its central place in DeFi.
Within a few months, the value of Bitcoin leaped. Ether starts the year even better. This week it beat its previous ATH of 2018. Since then, however, the price of ETH has hovered around $ 1,300.
Could the concentration of investments in favor of the two main cryptocurrencies drive its value to new heights? For an analyst, the growth potential of Ether is considerable.
Ether: the best risk / reward ratio of crypto
Fundstrat strategist David Grider sets an achievable target of $ 10,500. This would amount to multiplying by 7 the current value of the native Ethereum token. In a note to investors, spotted by Bloomberg, Grider therefore considers that ETH has serious advantages.
According to this expert, the crypto-asset would have “the best risk / reward investment ratio in crypto.” But he also insists on Ethereum’s predominant place in the growing field of decentralized finance, or DeFi.
And the debut of ETH 2.0, with the adoption of Proof-of-Stake and increased scalability of the blockchain, should help further consolidate Ethereum’s position in this digital finance sector.
In fact, 96% of the volume of transactions on DeFi is carried out through the Ethereum blockchain. And this domination is also found in terms of active crypto-wallets. Ethereum wallets thus account for 57% of active wallets each day.
Ethereum, pillar of decentralized finance
However, DeFi players regularly complain about the Ethereum network congestion. This is causing transaction costs to skyrocket and thus penalize economic models that are still fragile.
Moreover, despite the success of staking on ETH 2.0, the commissioning of the next version of the blockchain will still take time. It should take at least 2 more years for Ethereum v2 to enter production.
These known weaknesses of Ethereum do not seem to penalize the price of Ether at this time, however. According to Cointelegraph, cryptocurrency has gained more than 100% in the past 30 days. And the Ethereum network processes 28% more transactions every day than Bitcoin.