In recent years, Ethereum has become a major player in the cryptocurrency world. So, what is Ethereum worth in 2024?
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
Ethereum is used to pay for transaction fees and computational services on the Ethereum network.
ether, is used to pay for these services. Ether is like a vehicle for moving around on the Ethereum platform and is sought by mostly developers looking to develop and run applications inside Ethereum.
As of January 2021, ether’s price was around $1,100.
The value of ether has seen tremendous growth since its inception in 2015. In 2016, ether’s price was $10.
As of January 2021, ether’s price is around $1,100, an increase of over 10,000% in just five years.
What drives the price of ether?
The price of ether is driven by two factors: use and speculation.
Use: The more people use Ethereum for transaction fees and computational services, the higher the demand for ether will be and therefore the higher the price will be. For example, if a new decentralized application (dApp) launches on Ethereum and requires users to pay transaction fees in order to use it, this will drive up the demand for ether.
Similarly, if an existing dApp sees an increase in usage, this will also drive up demand for ether.
Speculation: Like all assets, the price of ether is also driven by speculation. When investors believe that the price of ether will go up in the future, they are more likely to buy it today and hold it as an investment.
This increases demand and drives up the price. Conversely, when investors believe that the price of ether will go down in the future, they are less likely to buy it today and may even sell their existing holdings. This decreases demand and drives down the price.