An analyst who accurately predicted a spike in trading for Ethereum, the world's second-largest cryptocurrency by market capitalization, has forecasted an even more dramatic rise by the year's end.
Megan Kaspar, co-founder of the digital asset management firm Magnetic, predicted in January that Ethereum would reach the mid-$3000 level since she said the cryptocurrency was being overlooked.
Ethereum Price Prediction: Reaching $3500 Mark
On Friday afternoon, Kaspar's prediction hit paydirt, with Ethereum rising 400 percent to breach a record $3400 mark, according to a CNBC report.
Now Kaspar is saying that Ethereum price levels would hit the $8000 to $10000 level by the end of the year. Kaspar talked to Yahoo Finance Live to explain her glittering forecast, emphasizing new updates to the cryptocurrency network that will happen by late 2021. The network is set to abandon an approach used by Bitcoin to confirm transactions to another method that is less energy intensive.
Bitcoin has the method called proof of work, which compensates miners who compete with each other in using computers and energy to document and confirm transactions on its blockchain.
Ethereum Value Seen to Explode with "Proof of Stake"
Ethereum, per Kaspar, would adopt a more effective proof of stake approach, which randomly selects a block validator depending on the amount of ether it controls. The move to "proof of stake" for block validation would lessen carbon emissions by about 99.9 percent, said Kaspar in the Yahoo Finance Live interview.
These shifts on the network could take ethereum to a trillion-dollar market capitalization that would bring the open source blockchain to about $8000 to $10000 a coin, Kaspar said.
Ethereum Price Target Matches Analyst Predictions
With Kaspar's soaring prediction, which is a 300 percent increase from present prices, it would also match a $10,500 target from other analysts earlier this year, computing their prices from increased activity on the Ethereum network as decentralized applications continue to be developed on its platform. Usage of decentralized financial apps, which let users earn from their cryptocurrency assets, have grown exponentially from $10 billion in September 2020 to about $65 billion last month, as Forbes indicated.
Once changes to the network are completed, Kaspar said a "greener" Ethereum will draw more institutional attention that is relative to bitcoin. Chinese miners account for beyond half of the entire mining might on the network.
Ethereum Price Seen to Soar to $100,000
Kaspar said that as more investors focus their attention on this shift, institutional cash would let Ethereum soar to $100,000. According to her, institutions are mandating investments on clean, green technologies, which is the where Ethereum is headed. Unfortunately, Bitcoin's proof of network won't take that path unless it chooses to.
Even so, Kaspar forecasts an upside for Bitcoin, predicting that it may hit $200,000 by the year's end. Bitcoin was trading at $57,000 a coin on Friday. Other analysts also had a positive outlook for Bitcoin, with targets of $115,000, as they track the cryptocurrency as a commodity.