Ethereum’s price could reach $12,000 this year, according to Dr. Sean Dawson, head of research at Derive. This would be a 257% increase from its current price of $3,361. Dawson believes that Ethereum’s price could rise because of a major upgrade to its network, Donald Trump’s support for crypto, and increased interest in Ethereum-based financial products.
Researcher expects Ethereum to reach $12k this year. Source: X Why Ethereum’s Price Might Go Up
One reason for the possible price increase is Ethereum’s Pectra upgrade, planned for early 2025. This upgrade aims to make the blockchain faster and more efficient. Dawson said that if Ethereum successfully launches this upgrade and more people start using Ethereum for real-world financial products, its value could grow.
Dawson also explained that Trump’s potential pro-crypto policies could create a better environment for Ether. If the U.S. government supports crypto, it might encourage more investors to buy and use Ether.
How ETH Is Growing
Ethereum is being used in more areas, including artificial intelligence (AI) and real-world assets (RWAs). RWAs are traditional financial products, like real estate or stocks, that are brought onto the blockchain. Dawson pointed out that more exchange-traded funds (ETFs) focusing on Ether could help drive demand.
Matt Hougan, head of research at Bitwise, mentioned that Ethereum and its layer-2 network, Base, are popular platforms for AI applications. Layer-2 solutions help the blockchain handle more transactions quickly by processing some data off the main Ethereum network.
Market Shows Bullish Sentiment
According to Dawson, traders in the options market are optimistic about Ether’s future price. On the trading platform Derive.xyz, there are 250% more call options (bets that the price will go up) than put options (bets that the price will go down). This suggests many investors expect Ether’s price to rise.
Risks to Ethereum’s Growth
Despite the optimism, Dawson warned that Ether’s price could fall below $2,000 in certain situations. For example, if the spot Ether ETF (a type of fund that directly invests in Ether) does not attract enough large investors, Ethereum’s price could drop. Dawson also noted that other blockchains, like Solana, could gain more attention and take market share away from Ether.
In strong markets, some investors prefer blockchains that have the potential for faster growth, even if they are riskier.
More People Are Holding ETH
Ethereum exchange reserve is falling. Source: CryptoQuant
Additionally, Ethereum’s exchange reserve has been steadily dropping since early 2022, while the price has generally increased. The exchange reserve represents the total amount of Ether held on cryptocurrency exchanges. When this number goes down, it means fewer people are keeping their Ethereum on exchanges. Instead, they are moving it to private wallets. This suggests that people are not planning to sell their Ether anytime soon. Instead, they are holding onto it for the long term, hoping the price will rise.
Currently, the exchange reserve is around 19.5 million, which is a significant drop from over 29 million in early 2022. Meanwhile, at the time of writing, Ether’s price sits at $3,361.
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