For several weeks now, speculation has been circulating that the price of Ethereum (ETH) could rise towards $10,000 after the switch to PoS.
Merge represents the hope of Ethereum hitting $10,000
The reference point that many are setting as a possible high for this phase is $10,000 and Merge is getting closer as the first shadow fork has gone live.
This was the first time we attempted a mainnet-shadow-fork, we were expecting to learn a lot from the transition! The next week or so would be spent with sync tests against this fork and trying to trigger more edge cases.
We plan on repeating it next week, for advanced users 😉
— parithosh | 🐼👉👈🐼 (@parithosh_j) April 11, 2022
Firstly it is worth mentioning that the price of ETH follows Bitcoin’s four-year cycles. That is, until now it has always been heavily influenced by the BTC price trend, and this in turn is influenced by the four-year halving cycle.
Given that we are exactly halfway through the fourth cycle, which will end around April 2024, and given that Ethereum’s transition to PoS is scheduled for the middle of this year, the question many are asking is whether the price of ETH will be able to reach $10,000 by April 2024.
To be honest, this seems a somewhat difficult hypothesis to come true.
Taking the price of Bitcoin as a reference, which is currently around $40,000, the high of the current cycle could reach over $100,000. Therefore it is expected to increase by 150% from current levels.
The current price of ETH is around $3,000, so to get to $10,000 it would have to increase by 233%.
Such a disparity in increase is possible, but unlikely, especially given the performance in past cycles. While it is true that the increase in value of ETH after Bitcoin’s second halving was far greater than that of BTC, after the third halving the difference narrowed. Moreover, in the two years before the halving, the price of ETH fell more than that of BTC.
If both were to make a +150% from now, the price of Ethereum would reach $7,500, which is a long way from $10,000.
If we take the highs of $69,000 for BTC and $4,800 for ETH as a reference, assuming a 45% increase, the price of Bitcoin would rise to $100,000 and Ethereum to $7,000.
It is also worth mentioning that in the two years preceding the last halving, Bitcoin’s dominance went up a lot while Ethereum’s went down.
Empirical data analysis
In light of this data, it is hard to imagine that the price of ETH will reach $10,000 before the end of the current cycle, though in theory it could do so in the next cycle.
Bitcoin’s third cycle already saw less price growth than the second, and the fourth saw even less growth.
However, there are those who believe that in the next cycle Bitcoin’s price could aim for $400,000, so in theory there would be room for Ethereum to break $10,000.
There is no certainty that prices will rise in the future and indeed it is even possible that they will fall. Moreover, the further the imagination goes, the less certainty there is, so trying to guess the prices of the next cycle at this time still seems very premature.
What is clear though is that $10,000 for ETH is not the same as $100,000 for BTC, as of the two targets, Bitcoin’s seems decidedly easier. And since it is Bitcoin that still leads the crypto markets, $10,000 for ETH before April 2024 seems unlikely at this point.
However, this could completely change if a new big speculative bubble, like the one in 2017, were to be triggered, since there was none in 2021. But this is extremely difficult to predict at the moment.