After going down to $390, Ethereum just went back to almost $691, noting an increase of almost 80% in just under a month. The digital currency took a huge plunge following the massive price of $1,330 in December. The reason for the increase in price at the end of last year may be owing to the overconfidence in the cryptocurrency market, as well as the promising technology behind Ethereum and its versatile applications.
According to Maxwell Arnold, the co-author of the Laser whitepaper on Blockchain, Ethereum may hit the $900 level some time in 2018, as reported by Express UK. According to the expert, Ethereum is likely to bounce back because of the functional advantages it has over fiat currencies. In addition, the smart contracts that Ethereum works with as opposed to other digital currencies are also a huge advantage that Ethereum has. Overall, from a technical point of view, Ethereum can be deployed across a wide sector of applications, making the currency and technology both extremely versatile and valuable.
There might be several explanations as to why the price is currently going up. One possible reason for Ethereum to appreciate in value is because of the so-called Casper protocol and its implementation. Again, according to Mr. Arnold, the potential implementation of the Casper protocol may result in Ethereum’s price going up. If that happens, then ether will turn from proof-of-work to proof-of -stake coin, which is the ultimate goal of the Ethereum community. In October 2017, the founder of Ethereum, Vitalik Buterin, commented that the Casper update may come very soon.
Another reason may be the competition between cryptocurrencies themselves. For example, there are hundreds of coins and ICOs are on every corner. However, while some are successful and manage to get ahead of their competitors and up in the market capitalization rankings (Litecoin, Ripple etc), most are either disappearing or cannot appreciate in value. Investors may be realizing the unique features of cryptocurrencies like Ethereum, Bitcoin and Ripple. So, the sharp increase in price may be due to that as well.