Ethereum’s next clear threshold is $1k. Will ETH hit $1k in 2020, 2021, or beyond that? We use empirical option pricing data to generate a random walk model that gives you hard numerical predictions for when ETH will hit $1k or even $2k.
Which model to use for Ether price movement?
When Ether hits a certain price depends on your model.
The industry gold standard numerical predictions that is first-order accurate is a random walk model that pulls volatility information from actual trade data. This is the model we use, pulling implied volatility from Deribit.
The random walk model is appropriate even if you’re a Ethereum / ETH bull or bear. You can believe that in the long run, ETH will go up. But if you believe that short-term, fluctuations in ETH price every minute are mostly uncorrelated, then you believe in the random walk model. This model also generates cold hard numbers to inform your investments, versus vague pronunciations of “resistance” or “profit taking”.
When will Ether hit $1,000 in 2021?
Running 1,000,000 ensembles in using our gold standard model, we project that ETH will at least touch $1,000 with 62% chance on or before December 31st, 2021.
But 2021 is a long time. When exactly will ETH actually hit $1k?
The below chart gives the cumulative distribution of when Ether will hit $1k. To read the chart, first take a date like 2021-07-01 (which lines up to the “2021-07” tick below). Find the date on the x-axis, and then go up to the y-axis, where you get .50. This means that Ether will hit $1k on or before 2021-07 with 50% chance.
You can see that that there is a 60% chance of hitting $1k before November 2021, and a 25% chance of hitting $1k before March 2021.
What the highest price that Ethereum will hit in 2021?
From our same model, we can calculate the highest price that ETH will ever hit before the end of 2021. We calculate that Ethereum’s median high price in 2021 will be $1,100, and Ethereum’s average high price will be $1,692.
Why is the average high price greater than the median high price? Because of positive skew: in the best ensembles from our simulation, Ethereum’s high price is much higher than average. In fact, there is a 1.1% chance Ethereum breaks $10,000 in 2021. 1.1% is a relatively high chance for hitting $100,000 so soon!
The plot below shows the cumulative density function of ETH’s high price before end of 2021. You can read the chart by taking a price on the x-axis, like $50,000, and then tracing up to the y-axis which is about 75% chance. This means that ETH’s 2021 high price has a 75% chance of being below $50k. The graph truncates at $150,000 (so $150,000 below should be read as $150,000 or above).
What the lowest price that ETH will hit in 2021?
Before you get too optimistic, realize that Ethereum’s volatility (even more than ETH) means that the highs can be high, but the lows can be low too. The same exact model above can give us low prices for the year. The median low price is $330, which is also approximately the mean low price. In the worst case, the 20%tile low price is $180. These low prices emphasize one point: have patience and hold through the low periods — HODL!
Just like before, the below gives the cumulative distribution of low prices in our simulation:
When will Ether hit $2k in 2021?
If you think that $1k is already likely, the next question to ask is, when will Ethereum hit $2k? Will ETH hit $2k in 2021? This price level would be nearly double the 2017 all time highs, and represent a watershed moment where everyone who has every bought and hold Ethereum as of today will have doubled their return.
Our analysis shows that there is 25% chance ETH hits $2,000 before the end of 2021. In fact, there is a 11% Ether hits $2k before midyear, (before July 1st 2021) even.