This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Ethereum (CRYPTO: ETH), or rather, the Ethereum ecosystem's Ether token, is the second-largest cryptocurrency on the market. Ether prices soared all the way to $4,892 in November 2021, but have come back down to roughly $1,500 per coin today.
Inflation concerns and a lack of robust cryptocurrency regulations have weighed on the crypto market as a whole, and on high-flying market darlings like Ether in particular.
However, the crypto market has shown some signs of stabilization and recovery in recent weeks. Ether's price has gained 67% from its three-month lows, and many investors are wondering how high this digital asset can go from here. For example, will it ever be worth $10,000 per coin?
Market cycles and volatility
First of all, some people believe that cryptocurrencies are a fad with no inherent value at all. I'm not here to change your mind about the fundamentals of the crypto market, so if you fall in this group, you'll probably be happier reading up on the best stock ideas on the market instead. It's all right -- cryptocurrencies aren't every investor's cup of Lapsang souchong.
But among those who see real-world value in ultra-secure digital ledgers with extra features such as smart contracts and decentralized management, Ethereum is expected to bounce back from this downturn.
The crypto market has been highly cyclical so far, and 2022 looks a lot like the correction in 2018. Back then, Ether had never traded above $1,450 per coin and investors were wondering whether the cryptocurrency would get back up to the $1,000 level.
So the 52-week lows nowadays are comparable to the all-time highs of the previous upswing, and the beat goes on. But things are different this time because the cryptocurrency phenomenon is growing up quickly.
What may have looked like a forgettable fad four years ago is now powering decentralized finance apps, innovative loan and insurance services, online games, and international money transfers.
Regulators around the world are taking cryptocurrencies much more seriously today, and fellow sector giant Bitcoin now serves as an official currency in two countries.
Can Ethereum get back on its feet again?
The cryptocurrency market as a whole should achieve a full recovery in a year or two, followed by continued long-term growth. Again, I'm basing my analysis on the idea that developers will keep producing crypto-based products, apps, and services that consumers and businesses find useful in the real world.
As a veteran of the sector, with unique features and an unmatched army of app developers, Ethereum is poised to lead that surge from the front. Don't forget that this crypto network is about to roll out the most important technology upgrade in its history, erasing the speed and efficiency advantages that some Ethereum rivals are boasting of today. This old dog is happy to learn new tricks.
In order to reach a price of $10,000 per Ether coin, the cryptocurrency has to double the peak prices seen in November. The target price is nearly seven times the current level. That sounds like a lot, but the volatile crypto market can deliver moves of that epic magnitude in a hurry. For example, Ether prices rose more than 20-fold from March 2020 to March 2022.
It's a question of time
There are no guarantees that the next recovery will look like that, of course. Let's just say that I wouldn't be surprised if Ether multiplied its market value by seven or more amid a general crypto market recovery, with its own platform upgrade providing more fuel for the fire.
All the components of this potential future are in place, and the bullish market move is just a matter of time -- as long as you agree that cryptocurrencies and blockchain networks have a useful future.
Under these circumstances, Ethereum looks almost certain to reach the $10,000 pricing milestone, and then keep going up in the long run. In the process, the market cap will pass the trillion-dollar mark when Ether prices reach $8,221 per coin. As I see it, these landmark metrics are coming, and probably within the next year or two.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
