Ex-Ark analyst, now Amun tokens head James Wang expressed his thoughts on why ethereum could “easily” hit the $10,000 mark by year-end based on the recent price action.
In an interview, Wang hinged his strong prediction on the exponential growth of decentralized finance (DeFi), including DeFi applications outside the Ethereum network.
With the recent bullish performance of ether, Wang had his view that the said cryptocurrency could reach as high as $40,000, a valuation framework set by the former CEO of crypto exchange BitMEX Arthur Hayes.
Just last Friday, the second-largest crypto just hit the $4,400 ceiling, its new highest record.
Over the past few months, rival new layer-1 protocols like Solana, Cardano, Polkadot, and Avalanche have also joined the wagon and continuously getting their own share in the market. Because of this popularity surge of the new alternative coins, Wang has become more confident on Ethereum.
He said that these new altcoins were basically “copy-paste versions of the Ethereum protocol” in core concepts, business models, and use cases.
Wang also credited the resilience of Ethereum despite the fierce competition of the market at present. Ethereum’s market share shrunk from 99% to 70% in the last six months.
However, Wang attributed the lost share due to the heavy incentivizing scheme of the new rivals offered to the market.
“They are basically giving away free money…. By that very raw brute force method, they have been able to attract some capital, but this capital tends to be very mercenary. This capital will chase wherever is the highest yield, go-between chains, and flip very often”, Wang said.
How ethereum could hit $10K by yearend
Last August, Ethereum rolled out its Ethereum Improvement Proposal (EIP) 1559, in which part of the fees paid to its miners are burned that would result in a decrease of coins from circulation. It is likewise coupled with the upgrading of the network usage capacity.
Since implementing EIP 1559, Ethereum has successfully removed 668,339 ETH coins representing 50% of the new coins released over the same period.
Real Vision CEO Raoul Pal noted that ether was trading at $4,249 and following the 2017 price action of bitcoin, which rushed to $20,000 from $1,000 mainly in the fourth quarter of that year.
According to Wang, it is expected that the price of transactions on the Ethereum network will drop over the next year because of the upgrades it is undertaking at the moment. In addition, more layer-2 solutions and rollups will be utilizing its blockchain.
The highly anticipated merger of Ethereum’s mainnet and beacon chain in mid-2022 will officially transition the network’s transaction process to proof-of-stake from proof-of-work. This can make ether’s price “go ballistic and haywire,” Wang said.
He further said that the trajectory that Ethereum is following for the next year is truly unparalleled in its history. If unhampered, he sees that the competitive gap between Ethereum and its rivals will widen dramatically.
He likewise predicted that $10k for this year could easily be hit provided positive price action continues.