1. Ethereum as the infrastructure of the entire Web3
$ETH is not just a cryptocurrency, but fuel for the entire Ethereum network on which most decentralized applications (DeFi, NFT, DAO) operate.
The increase in the number of projects based on Ethereum and the growing utilization of the network directly translate into higher demand for ETH.
If the DeFi sector returns to the records from 2021 and exceeds a TVL (Total Value Locked) of 200 billion USD, the price of ETH could gain significantly.
2. Technological improvements: Scalability and fees
Updates such as Danksharding and further development of the PoS (Proof of Stake) consensus layer can reduce transaction fees and increase throughput.
Rollups (Optimism, Arbitrum, zkSync) improve efficiency and lower costs for users, which may attract more developers.
The more scalable and cheap Ethereum becomes, the greater its potential global reach.
3. Deflationary effect of ETH after EIP-1559
Since the implementation of EIP-1559, a portion of transaction fees has been burned, reducing the supply of ETH in circulation.
With high activity, the ETH network may become deflationary, which, combined with increasing demand, favors price growth.
4. Inflow of institutional capital
Confirmation and introduction of a spot ETF on ETH in the USA could be a catalyst for inflowing billions of dollars from traditional markets.
Large funds and investment firms treat ETH as 'digital gold' – a hedge and a tool for exposure to the entire Web3 sector.
5. Broad bull run in the crypto market
Bitcoin often sets the direction, and its rise to new ATHs fosters capital inflow into altcoins.
In the past, at the peak of a bull market, ETH was able to grow faster percentage-wise than BTC.
6. Potential path to 5,000 USD
The current market capitalization of ETH is around 400 billion USD. At a price of 5,000 USD, it would be about 600–650 billion USD.
This means the need for a several dozen percent increase compared to the previous ATH (~4,900 USD from November 2021), which is within reach in bullish conditions.
7. Risks and obstacles
Competition from other L1s (Solana, Avalanche) could take a portion of the market.
High fees during periods of high activity may deter users if rollups do not pass the test.
Possible regulations limiting staking could hinder momentum.
