Indeed, Ethereum seems to be under the spotlight throughout 2021. That it has already surpassed Bitcoin since the beginning of the new year. While the overall market cap is around $492.2 billion for Bitcoin, it is around $81 billion for Ethereum.

Ethereum’s price showed a fluctuant outlook that the coin was trading up and down at the end of 2020. Its price was ranging between $550 and $750. However, after fluctuating between these two levels for a while, it has started to recover. Later it has dramatically increased and reached $1,400 -a new all-time high- in the first weeks of 2021. Investors predict that Ethereum can earn $1,500 in the short term and $2,500 by the end of 2021. The factors behind Ethereum’s growing performance are the development of the DeFi sector, Ethereum’s technological advance, and BTC’s low volatility in the recent period.

Experts believe that ETH has the chance to maintain its increase throughout the new year as the decentralized finance sector grows. Which has recently witnessed $25bn in total value locked (TVL). While more and more people are showing an interest in investing in the DeFi sector since it is becoming popular and attracts more users, developers, and money, Ethereum -associated strongly with DeFi -will likely be affected positively. 

Another reason that displays a good year for Ethereum is the foundation’s new Ethereum 2.0 (ETH2). Despite the transition to ETH 2.0 officially launched on December 1, 2020, it was known that the foundation has been working on the shift towards ETH 2.0. The transition is believed to develop the Ethereum network’s security, efficiency, and scalability. Ethereum’s technological development could also solve the problem of speed. It will enable ETH to complete a transaction in under 15 seconds. This is to say, based on the recent reports, Ethereum is now processing 28 percent more transactions than Bitcoin.

Lastly, it could also be a significant indicator to mention that Bitcoin, relatively, shows a steadier characteristic with low volatility which could be regarded as coming of alt-season. Also, Ethereum can engage with new business models that give ETH a chance to be adopted broadly. All of the factors mentioned above -growth of the decentralized finance, transition to Ethereum 2.0, the upcoming hype for altcoins – provide an optimist outlook concerning the price predictions of Ethereum.