Ethereum (ETH)–Alexis Ohanian, a co-founder of popular website Reddit and current venture capitalist, told Fortune in an interview on Wednesday that he predicts Ethereum will reach 1,500 USD by the end of 2018. His prediction also includes a bullish outlook for Bitcoin, eclipsing last December’s all time high to surpass 20,000 USD:
OHANIAN: At the end of the year, Bitcoin will be at $20,000. And Ethereum will be at $1,500. [Note: After publication, Ohanian said he misspoke. He meant to say Ethereum will be at $1,500.] Great, now people can call me out if I’m wrong.
While Ohanian’s comments are a bit tongue-in-cheek, referencing the looming backlash for such a gigantic prediction, he also supports his reasoning for the high valuation of Ethereum, “people are actually building on it.”
Ethereum, Bitcoin and the Stagnating Crypto-Market
Ohanian’s analysis of cryptocurrency echoes that of other industry-leaders. While blockchain and cryptocurrency have managed to develop a large amount of interest around the world and in the field of finance, particularly for the four-digit price gains experienced in 2017, the market as a whole is stagnating from a lack of use. Former PayPal CEO Bill Harris wrote a divisive article for Recode last week that cited the lack of legitimate uses for Bitcoin creating the conditions for the “greatest scam in history.” Warren Buffett piled on the cryptocurrency FUD this past weekend speaking to Yahoo Finance, when he reiterated his claim that Bitcoin, and crypto by expansion, is another bubble that will end poorly, and that investors are doing nothing more than gambling on speculation.
While the counterarguments to these claims rely mostly upon the underlying features of the technology, the crux of cryptocurrency value still comes in the form of what it could potentially offer. Bitcoin has been around for nearly a decade. The cryptomarkets command 450 billion USD. While adoption can be a slow process to reach the tipping point of exponential growth, it’s time for Bitcoin and other cryptos to do more in the way of filling real world needs.
It’s possible Ohanian is heavily invested in ETH, and is using his position as a venture capitalist to pump the returns on Ethereum. But, more than likely, he is adding his analysis of the market to counterbalance the claims of Buffett and Harris that have filled headlines for the past week. Ohanian’s prediction would require Ethereum’s market cap to grow beyond 1.5 trillion USD, up from the 75 billion USD it commands as of writing–hence the tongue-in-cheek reference at the beginning of the article. Ohanian’s prediction is probably better suited with that of Nigel Green, CEO of financial consulting firm deVere Group, when he predicted in early April that ETH would reach 2500 USD by the end of 2018. Should Ethereum reach Green’s predicted value, it would command a market cap of around 240 billion USD, which is about 100 billion less than what Bitcoin controlled during December’s all-time high.
Even if Ohanian’s numbers are outlandish to occur in the next seven months, he draws attention to the growing value in a project like Ethereum: developers building on the project. Green echoed a similar sentiment by the deVere Group’s valuation, stating the growing interest in smart contracts and the potential of Ethereum’s network, in addition to digital transaction capabilities, superseded market excitement for Bitcoin. Ohanian also purposes a get-the-ball-rolling attitude towards cryptocurrency and blockchain,
“This year, it’s all about blockchain. Most of it is just hype and BS, just like how it was with [artificial intelligence] and [machine learning]. Most of the really vital, protocol-level, basic infrastructure around software and blockchain will need to get built in the next year or two for us to really see the Web 3.0 we’re really hoping for… These are the types of things I think will build the foundation for a very different, much better Internet.”
It’s difficult to predict which currency will pave the way for Web 3.0. TRON is establishing a Main Net to rival Ethereum and provide a new digital platform for the entertainment industry. Bitcoin has the brand-awareness and market share to insure it will be in any conversation surrounding future crypto adoption. However, Ethereum, with its emphasis on network features, smart contracts, and robust list of Github commits, is a major contender for shaping the future of cryptocurrency.