Ethereum’s price hitting $20,000 is a hot topic. Will it happen? One investor thinks real-world adoption is the key.
Real-World Use: The Path to $20,000 ETH?
Investor Ryan Berckmans believes Ethereum’s success hinges on practical, real-world applications. He argues that high transaction fees, often seen as a negative, actually show strong network confidence. People are paying more because they believe in Ethereum’s value.
He uses Bitcoin as an example. Bitcoin maintains its value despite most of its activity being centralized. Berckmans says Ethereum needs to focus on real-world growth to mirror this success. Simply put: real-world use is the answer for ETH to reach $20,000.
The Importance of High Fees
Berckmans emphasizes that high transaction fees are crucial for Ethereum’s price increase. Even a massive amount of stablecoins on Ethereum’s main network (Layer 1) wouldn’t be enough without high fees to back it up. He stresses the need for strong network growth to build investor confidence. Without it, hitting $20,000 seems unlikely.
Scaling Up: Layer 1 and Layer 2
Berckmans highlights the need for more applications on Layer 1 and better integration with Layer 2 solutions. This expansion is vital for sustainable growth. Ethereum needs to improve how it distributes assets between Layer 1 and Layer 2, and offer more diverse Layer 2 solutions. This scaling is essential to handle increasing network activity and user demand.
Focusing on Real-World Utility
As Ethereum celebrates its 10th anniversary, Berckmans acknowledges its progress but emphasizes there’s still a long way to go. While it’s the leading blockchain by application, it needs to scale significantly to maintain its position. By focusing on real-world use and economic development, Ethereum can pave the way to its price target.
The Bottom Line
Ethereum is at a crucial point. To reach $20,000, it needs to prioritize real-world adoption and growth. According to Berckmans, this is the path to success.
