With new technologies and advancements are clouding the cryptocurrency space, Ethereum is also at the forefront of major transformation. Over the past month, Ethereum price has been on a roller coaster ride with the digital token reaching an all-time high in November, which eventually fell to a major catastrophe now. At the time of writing, ETH was traded for US$4,180 with a market capitalization of US$495.34 billion. On Saturday, the cryptocurrency has recorded a 10.14% loss, the largest one-day percentage fall since November 26, 2021. When things look very unstable for Ethereum, we explore if the crypto has the opportunity to make a comeback in 2022.
Ethereum is a blockchain model focused on designing all types of applications. With the popularity of non-fungible tokens (NFTs) and decentralized finance (DeFi) on the growth path over the past year, scalability has gained momentum. Fortunately, futuristic and advanced blockchain models like Ethereum is seen as the only remedy. Initially, the ETH platform grew as a marketplace for buying and selling cryptocurrencies. However, as technology evolved, the platform has introduced advancements that could lower the transaction fee and improve the speed. Although all these developments are inevitable, Ethereum price is still on a downward trend that is worrying the investors. Recently, the digital token has reached an all-time high of US$4,864.06 on November 10, 2021. It came as a surprise to everybody because usually, ETH follows the trend of Bitcoin. This time around, Etherem price made a record even when Bitcoin was following a moderate value. However, Ethereum's price surge didn't last for a longer time. However, the cryptocurrency is back to its moderate state. In this article, we look at the possibilities of ETH making it big in 2022 and beyond.
Originally, Ethereum was designed in a way that would slow down and become more expensive as its popularity increases. However, ETH has come up with a Layer 2 project that could help the underlying blockchain technology to keep its ground. If the update gains momentum, Ethereum might only be directly used for very large transactions in the future, with the massive transactions happening on the Layer 2 network.
Layer 2 solutions including Arbitrum, Loopring, Optimism, and StartkWave will lead the transition. According to tracker L2Berat, about US$7 billion value of transactions is locked in Layer 2, compared to US$48 million at the beginning of the year. However, further advancements are already on the way in which ETH could gain traction in 2022.
Recently, Metaverse ecosystem and play-to-earn gaming facilities are gaining traction among people. Not just crypto investors, even non-investors are trying their hand on the new model. Ronin-based NFT game Axie Infinity has already generated millions of dollars in annualized revenue, thanks to blockchain development. As the gap between finance and gaming narrows, the Ethereum platform has the chance to make it a win.
On the other hand, we have Airdrops and equity distribution that have distributed wealth much more freely and fairly than ever before. If Ethereum manages to break all grounds in the coming months, 2022 will be a great year for the cryptocurrency. It can even manage to overturn Bitcoin with its potential.
Although Ethereum outperforms Bitcoin on many fronts, its major key is the underlying blockchain that allows developers to create decentralized applications (dApps). While Bitcoin was created in 2009, its blockchain was created to support public ledger cryptography. Unfortunately, BTC was unable to engage in many updates over the years. Today, Ethereum is driving the change as it creates new concepts to improve the dApps ecosystem. Beyond NFTs and decentralized applications, Ethereum's concept is expanding into the tokenization of physical items including real estate.
Similar to Bitcoin, Etheruem is also all set to gain institutional investors in 2022. Ethereum price has gained over 500% growth in 2021, which is higher than that of Bitcoin. Besides, the introduction of 'Ethereum Burn' option has also given an edge to the cryptocurrency against its long-time competitor, Bitcoin. According to predictions, Ethereum price will breach its long-term resistance of US$5,000 in 2022. If other things go well, it can even touch US$10,000 and make a record rally in the coming year.
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