Ethereum Price Could Replicate Bitcoin's, Hit $20,000 According to Metcalfe’s Law: Economist

If Metcalfe’s Law is to be followed, Ethereum could likely hit $20,000 just as Bitcoin did in the past, analysts say.

Metcalfe’s Law could be the key to pinpointing the future price of Ethereum just like it was for Bitcoin, according to macro trader Raoul Pal. After examining data from the point when Bitcoin first hit 1 million addresses and applying that to Ethereum, Pal said the price chart appeared similar.

Metcalfe’s Law states that the effect of a telecommunications network is proportional to the square of the number of connected users of the system. Simply put, the more users there are in the network, the more that network will grow on its own.

In a separate report, Seeking Alpha’s D.H. Taylor, who studied macroeconomics and statistics, also posited that when one looks at Ethereum’s network size, number of connections and price trajectory, Metcalfe’s Law is being manifested in a way that actually exceeded that of Bitcoin’s movement.

Taylor did admit that Metcalfe’s Law could be applied to cryptocurrencies in general in the same way the law originally meant for telecommunications has been applied to the growth of networks such as Facebook.

“The more that people integrate cryptocurrencies in their lives, the more that cryptocurrencies are being accepted, and that growth continues to push cryptocurrencies in general,” Taylor wrote.

Ether usually follows the trajectory of Bitcoin’s price. However, while Bitcoin has already exceeded its previous all-time high price that was hit in December 2017, Ethereum is still $100 below its all-time high of $1,400. But analysts expect this price to get broken soon.

Ether’s price has grown 60% since 2021 began on the back of continued developments surrounding decentralized finance. Alternative blockchain protocols like Polkadot have also increased their token’s value. Polkadot, in particular, shot up to the top 10 largest cryptocurrencies by market cap, even eclipsing Ripple to become the fourth largest.

According to Cointelegraph, there is no specific correlation between Ether and altcoins, but blockchain projects around decentralized finance could increase in value primarily because most of them are being built on Ethereum.