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Ethereum has had one of the most successful years of its existence. In the last year, its price has grown 10 times to the current $4,700.
This has made it cement its position as the second-largest cryptocurrency in the market after Bitcoin.
The key question in every investor’s mind is what is next for the coin. However, there is a common sentiment there is a possibility of the coin hitting the $5,000 mark soon.
Ethereum is arguably among the best cryptocurrencies in the market. It leads in the innovation front and is very versatile to the changing global market conditions.
High Inflation Levels
Global Inflation levels are growing forcing investors to look for alternative safer assets and cryptocurrencies are offering just that.
This is attracting a lot of money into the top cryptos due to their stability. Among the list is Ethereum. As the number two in the market, it is an obvious choice coupled with its huge growth in the past 12 months.
An increase in demand will continue in the future helping its price to potentially rise further. With The current conditions, there is a high likelihood of Ethereum getting to $5000 and may be higher.
Ethereum Coin Burning
Since the implementation of the London Hard Fork update on the Ethereum network, coin burning is accelerating.
The strategy is to ensure it retains value by controlling supply. Data from the watchtheburn website indicates burning of Ether coins worth over 4 billion dollars.
Among all the crypto tokens that have a coin-burning strategy such as Shiba Inu Token and Solana, Ethereum is arguably the biggest of all.
This trend is likely to keep the price of Ether rising in the future. Hence, it is a key reason why most analysts believe there is a likelihood of Ethereum getting to $5,000.
Change to The Proof of Stake Concept
This update also targets shifting the coin from the Proof of Work to the Proof of Stake concept. This will eliminate the mining process in creating new Ether coins and embrace staking instead.
It is being driven by the recent outcry in the market on the use of high amount of energy during coin mining. Huge energy consumption has a relationship with climate effects and hence the need to shift.
This has given Ethereum more credibility and is likely to get more attraction due to its consideration as a clean coin.
One of the negative, this is a big blow to the miners who have invested a lot in the mining infrastructure both In hardware and software.