Ethereum has had a rough September 2021, possibly even worse than the rest of the crypto market. It saw a 13% price drop following a chain split in late August, a hacking attack, the limited impact of the London upgrade that was supposed to speed up its network and reduce transaction fees, and more.
Meanwhile, its competitors are becoming more and more competent, as well as more attractive with each passing day. With Ethereum 2.0 still in the air, the title of Ethereum Killer is up for grabs, and numerous projects are giving their all in its pursuit.
However, Ethereum is not dead yet, and it did see some positive performance recently, despite the drop. For example, on the first day of October 2021, the Ether/USD pair on Coinbase saw a 9.82% price surge, leading the world’s second-largest cryptocurrency to the price of $3,288. Ethereum increased by $294 on this day alone, climbing an additional 2.35% over the following weekend.
At the time of writing, it sits at $3,368 and seems ready to continue its climb. Today, however, we are not that interested in what happened, but in what may happen given that certain conditions are met. Essentially, Ethereum could see a major price leg up if certain things come to pass, so let’s see what those may include. We have selected 5 factors that could act as the driving force behind the next rally, and those are as follows.
1. The reduction of gas fees
Ethereum’s transaction fees, or gas fees, as they are also known, have been a problem for ages now. As many likely know, Ethereum is a blockchain that depends on transactions, whether it is being used for development, trading, or if you use one of its many products, like dApps, smart contracts, and alike.
However, despite the reliance on transactions and micro-transactions, Ethereum is still only a bit faster than Bitcoin itself — arguably the slowest blockchain in the world right now. They are not exactly the same — Ethereum can process 15 transactions while BTC processes only around 7, and it does it a lot faster — 10-20 seconds compared to Bitcoin’s 10 minutes per block.
However, the crypto industry now offers blockchains that can process thousands of transactions per second, and Ethereum is clearly left behind in that aspect. All of this causes long waiting periods, and if you are in a hurry, you would simply opt to pay greater fees in order for your transaction to be selected for processing sooner. This pushes the average fee into the sky, which is a problem for everyone.
The London upgrade was expected to improve things, but so far, it did not happen. But, if it turns out that its effects were simply delayed, Ethereum could see a lot of people return, and its demand and price skyrocketing.
2. Ethereum 2.0
Naturally, Ethereum 2.0 is definitely on the list of things that are going to give ETH price a much-needed boost. With its development starting even before Ethereum itself was launched, Ethereum 2.0 is the longest anticipated upgrade in the crypto industry. However, if it were to arrive soon, it is expected that it would have a major impact on the coin’s price. Perhaps not immediately, but within weeks, or even days.
Unfortunately, the upgrade has been postponed and delayed countless times already, and while it did finally start on December 1st, 2020, its launch is a multi-year procedure that will not be finished for a while now.
Ethereum 2.0 is supposed to be a massive, innovative boost that will push the entire project towards the sky, although, until it arrives, its exact impact cannot be known — only speculated.
3. Mainstream adoption
Like Bitcoin or any other crypto, adoption is the main factor that drives Ethereum price. Everything else is simply expected to make ETH more desirable and help push its adoption. The reason for this is a simple game of numbers. If there are more people wanting the coins, then the coin’s value is greater. It is a simple supply-and-demand situation, which is why it is crucial for Ethereum to boost its user count.
Unfortunately, because of its shortcomings, the exact opposite has been happening, and Ethereum has been losing developers and users alike, while other, younger and more competent chains have been picking up everyone who dropped out of Ethereum. If the project could turn things around, it would surely once again see a price surge, and perhaps a new ATH.
But, in order to reach mainstream adoption, the change would have to be truly impactful to bring people back under its fold.
Another important factor that could boost the coin’s price is regulations. Regulations are crucial fr the adoption of cryptocurrencies, as they will prove to institutional investors that they won’t get into trouble for working with crypto.
Many believe that institutions are still mostly avoiding any direct contact with crypto due to their volatility, which is not the case. Institutions know how to handle volatility, create functional forecasts, and alike. Their problem is that they don’t know whether or not the governments will decide to make cryptos illegal or crackdown on them, which makes cryptocurrencies very unpredictable and potentially dangerous to use.
With this issue out of the way, institutional investors would have no real obstacles to participating in the industry. Even now, many are finding ways to join the sector, either by investing through intermediaries or by using crypto derivatives.
On the positive side, the regulations are in the works in many parts of the world, and even the US SEC agrees that they should be introduced as soon as possible. The problem is doing it properly, without hindering innovation and development in crypto, while still introducing proper measures to protect investors.
5. New trends
Over the years, Ethereum has given birth to a number of major trends, starting with ICOs, then dApps, smart contracts, DeFi, and finally, NFTs, which only went big earlier this year, but it already feels like they have been around forever. Despite all of its flaws, outdated technology, high fees, and alike, it has always been Ethereum that made these trends go big, and its efforts always resulted in major price boosts.
With that in mind, there is no reason to assume that the next trend will not get big on Ethereum, as well, before it spills out of its own boundaries and enters other exosystems. But, at this time, there are no indications of what this next trend might be, as they are always emerging rather spontaneously. With 2021 in its final months now, the next trend could start going big very soon, potentially before the year ends, or in early 2022.
It is worth noting that it might not arrive at all for a long time to come, given that the crypto industry is still very hyped about DeFi and NFTs. There is no way of knowing anything when it comes to things like these, but it is worth being on the lookout for potential trends lurking in the shadows and waiting for their time to shine.