Raoul Pal Ethereum Prediction

Raoul Pal has a bold prediction for Ethereum ($ETH) – he believes the blockchain network is going to hit $20,000 by the end of 2021. He tweeted his price forecast on Feb 3 to his following of around half a million followers.

He’s an influential presence in the crypto industry, but how accurate is Raoul Pal’s Ethereum prediction?

As the Co-Founder and CEO of Real Vision, Pal runs a financial media outlet that attracts almost one million visitors monthly. The for-profit company was founded in 2014 to focus on finance and business media with a focus on crypto and blockchain assets.

Ethereum is arguably a step up from Bitcoin in that it’s more than just a store of value. Instead of being a digital currency, it is a blockchain-based network for enterprise, government, and consumers to work on using smart contracts.

Think of Ethereum as The Internet 2.0; it’s the foundation on which so many other applications are built.

It has much more institutional support than in previous years when crypto market caps deflated. There is over $122 billion in institutional capital invested in the platform, and it’s the foundation for a growing decentralized development ecosystem.

But there are projects migrating away from it, including the EOS chain originally built on it and named Ethereum Operating System. Gas fees are expensive, and its Solidity programming language creates a barrier to entry for organizations considering migrating data to the blockchain.

Still, the price of Ether grew over $3,500.00 in May 2021, more than double its price three months earlier when Pal made his prediction. Let’s check the digital ledger to see if his prediction has validity.

Who Is Raoul Pal Real Vision?

Pal is the Co-Founder and CEO of Real Vision, a crypto-inclusive financial and business media outlet. He’s a macroeconomist who bought into Bitcoin in November 2013.

He’s a former Goldman Sachs executive who co-managed the firm’s European Equities and Equity Derivatives division. This gives him the insight to understand the differences between defi investments and traditional IPOs or even SPACs.

Pal invested a reported 98 percent of his net worth into crypto assets, which is a bold move, considering most investors recommend to invest only one percent in crypto. The rest should be invested in traditional ETFs that track indices like the S&P 500.

Real Vision and Pal are dedicated to de-stigmatizing crypto though, and he has some bold predictions that could create enormous turmoil among the financial status quo if proven true.

Raoul Pal Ethereum Prediction

Pal is bullish on Ethereum, and he believes the price could hit $20,000 by the end of 2021. There are several reasons he sees support that wasn’t there in 2018 when the industry deflated. This includes both institutional investment and the rise of non-fungible tokens (NFTs).

The success of Ethereum isn’t based just on being a store of value like bitcoin – it’s the success of projects built on Ethereum that will ultimately drive its mass adoption.

If the project gains enterprise adoption from multiple large organizations, it will have the product-market fit it needs to continue growing. The project already has a market capitalization around $416 billion. That makes it already larger than major companies like Bank of America (BAC) and Walmart (WMT).

But can it beat Bitcoin?

Raoul Pal Bitcoin Prediction

It’s not just Ethereum that Pal is bullish on – he also believes Bitcoin has room to grow too. The former Goldman Sachs exec issued an ambitious price target of $1 million for this current cycle, and it has a lot more institutional support too.

Elon Musk and his Tesla company bought $1.5 billion worth of bitcoin in late 2020. And the company plans to accept BTC for payments for its vehicles and services. This could be a major game-changer, and it triggered an avalanche of institutional investment.

Network value…(Metcalfe’s Law) pic.twitter.com/qzzUyT4FEb

— Raoul Pal (@RaoulGMI) January 7, 2021

Over the past two years, companies like PayPal (PYPL) and Square (SQ) more started adopting bitcoin as a form of currency and store of value. This continued to push the price to massive gains over double previous records set in 2017.

Moving forward, the deflationary nature of the coin could make its value continue to grow well over the price of a mansion.

But will it be overtaken by Ethereum?

Will Ethereum Surpass Bitcoin?

Bitcoin is the apex cryptocurrency, and so it has historically received the bulk of the attention from media. Proponents of Ethereum argue that Bitcoin is simply a store of value. Ethereum, on the other hand, is the foundational layer upon which smart contracts, non-fungible tokens, and a host of other applications are built.

The potential, they argue, for Ethereum is to be significantly larger than that of Bitcoin. Raoul Pal has stated that both cryptocurrencies’ prices are a function of Metcalfe’s Law and that Ethereum is actually growing faster than Bitcoin at the same stage of its lifecycle which would suggest it has the potential one day to eclipse Bitcoin. 

Both projects remain fraught with risk so the outcomes are uncertain for each still.

Can Ethereum Reach $10,000?

Bearish analysts argue that Ethereum isn’t likely to reach $10,000. They claim there is no real evidence to support such a price – few decentralized applications (dApps) exist is their main argument. The numbers they claim are awful, and there are more people actively using Myspace or receiving DVDs by mail from Netflix right now than using dApps.

And projects are fleeing the platform – EOS and others migrated. Companies are finding that it’s too expensive to pay gas fees or learn the Solidity programming language.

In short, although the price went up, usage of the blockchain network is a hindrance compared to startup apps like Clubhouse that have no blockchain component.

Advocates on the other hand claim that Decentralized Finance (DeFi) is only possible because of Ethereum. They claim the future is massive financial disruption where borrowers and lenders connect via the blockchain without the need for banks as intermediaries. And this is just one of the many applications Ethereum supports. Buying Ethereum today is like owning a piece of the internet in the 1990s. $10,000 is just a stopping point on the way to higher prices in their view.

Ethereum Will Beat Bitcoin: True or False?

In the volatile world of cryptocurrencies it’s not so outlandish to imagine a day when Ethereum will beat bitcoin.

Indeed the market cap of Bitcoin during the 2017-2018 bullish cycle was lower than the market cap of Ethereum today, yet Ethereum is a younger project.

Is it possible in another 2-3 years that Ethereum’s market cap outshines Bitcoin’s? Some say it will happen this year.

Regardless of if or when it happens, Ethereum’s founder Vitalik Buterin has already enjoyed the spoils of success from his project that have made him at least in the digital world, a billionaire – the youngest one in the world!

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.