Ethereum is a household name in the blockchain space, almost on par with Bitcoin at this point, and that’s with good reason. The value of Ethereum has crashed exponentially in 2022, but the wider market has decreased in value from around $3 trillion to $800 billion, which means Ethereum’s potential isn’t called into question. There’s no denying that 2022 has been a tough year for investors across the board, and it may leave people wondering whether Ethereum has the potential to make them rich in 2023 and beyond — continue reading to find out more.
Brief Ethereum Background
Ethereum, which was launched in 2015 by Vitalik Buterin, revolutionized the blockchain landscape by introducing smart contracts, which is a piece of computer technology enabling the creation of decentralized apps (Dapps), non-fungible tokens (NFTs), and decentralized exchanges (DEX). Essentially, they allow parties to form a digital agreement with set terms, which are activated once fulfilled. For example, a code proving ownership of an NFT is released only after the sale is finalized.
Ethereum has moved from strength to strength since then and is the strongest altcoin — only trailing behind Bitcoin. However, nobody imagined smart contract applications would grow so popular, which is why Ethereum was never designed to cope with the high demand facing the blockchain world today. This issue has been recognized and changes have begun, with the most recent being “The Merge”, but more on this later.
Historical High Points of Ethereum
When Ethereum first started, you could buy 1 ETH for less than $1, which was a great opportunity for investors that saw potential. During the first couple of years, Ethereum’s price increased steadily — ending 2016 worth $8.
In 2017, things began to get interesting because high volatility entered the Ethereum charts, with enormous spikes and falls. The first significant climb was April — June that year when it increased in value from around $40 to $326. The market value sauntered along through peaks and troughs until December 2017, when it jumped up to $772 by the end of the year.
Everything looked promising when 2018 came around — Ethereum started the year 600x its original value. However, this high was soon to fade away — right after breaching the $1000 mark. Unfortunately, despite a spide taking the cost to around $800, Ethereum’s value crashed back down to around $141.
Through 2019 and 2020, the value of Ethereum fluctuated between around $150 at the low point and $730 at the high. The changes up to this point demonstrate the volatility of crypto, but it did hold out around $600 for the most part — the next chapter is when things get exciting again.
If you were on the internet in 2021, you will have heard about or at least seen NFTs flying around. These smart contract JPEGs took the digital world by storm and blew up into a multibillion-dollar industry. Naturally, Ethereum’s value rocketed because the majority of NFTs are minted and traded there. By the end of 2021, the value of Ethereum had increased from its steady $700 to around $4,800 in November.
Crypto Crash Vs. Ethereum’s Potential
The end of 2021 saw an all-time high for Ethereum and the wider crypto market, but the buzz wore off and the value of the entire industry began to plummet. At the time of writing, Ethereum is worth $993.97 — a decline of around $3K.
You may think this is tied to the potential of Ethereum, but that’s clearly not the case because the entire crypto market has dropped in price. The most obvious reason for the fall is the rising cost of living, meaning investors are opting for safe assets, and the crash of several well-established coins (FTX and Terra (LUNA)).
Change In Consensus Method
Despite the market crash, Ethereum has made positive changes to its blockchain, with “The Merge”. In the simplest terms, this meant Ethereum’s layer 1 and layer 2 chains were being combined and the proof-of-work (PoW) consensus mechanism was being ditched in favor of proof-of-stake (PoS).
This move gained plenty of attention from investors, but they weren’t sure which way the chips would fall. On the one hand, those relying on ETH mining for a living were left in the lurch, but it’s made the chain environmentally friendly, cheaper, and slightly more scalable. If you wish to find out more about Ethereum, we recommend reading this comprehensive Ethereum guide, which includes an in-depth Ethereum upgrade guide 2022.
Conclusion
You’re likely waiting to find out if ETH will make you rich in 2023. However, the truth is that nobody knows 100% — and this is true for all cryptocurrencies. Yes, the chances are that prices will increase because of more mainstream adoption and understanding of blockchain solutions. If you invest in ETH, you’re likely to make some form of profit in 2023, but make sure you only invest to a budget you can afford to lose.
