Key Takeaways
- Ethereum’s price growth depends on real-world adoption and increased network activity.
- Ryan Berckmans emphasizes that high fee levels correlate with confidence in ETH, driving its valuation upward.
- Expanding L1 and L2 applications is crucial to achieving a $20,000 ETH price.
Ethereum investor Ryan Berckmans believes that real-world adoption is the key to ETH reaching $20,000. He asserts that high token prices don’t necessarily require a strong appreciation of the underlying value but are actually sufficient in real life.
Comparing Bitcoin with Ethereum, he highlights that BTC retains its value even though 99.999% of its usage is centralized and doesn’t even directly contribute to Bitcoin’s value.
As for Ethereum, trust in the platform is a strong appreciation driver, with high fee levels typically being matched with increased faith in the platform.
Berckmans rules out the possibility of ETH reaching the desired price without restoring high total fees. Even if a hypothetical scenario of $1 trillion of stablecoins on Ethereum’s L1 would be a confidence booster, he is of the view that this would still lead to increased fees.
Ethereum will eventually have to prioritize robust network growth for fee growth, restoring investor confidence, and pushing ETH toward its ambitious price goal.
Scaling Ethereum Through L1 and L2 Expansion
To achieve sustainable growth, Berckmans stresses the requirements for further L1 uses, increased distribution of L1 assets to the L2s, and a diversity of L2 solutions.
He emphasizes the significance of cross-L2 services, using the example of Aztec’s privacy offerings as a prime example of the potential for adding value. Instead of trying to change the economics of the L2 for the purpose of earning greater fees, he is convinced that real-world growth is the only sustainable direction.
Ethereum must also ensure that the increasing activity of the L1 apps and the L2s has sufficient block space on the L1. Future improvements, such as extra “blobs” for transactions for the L2s, should lower the cost but not the efficiency.
By encouraging developers to make useful implementations that increase the scope of Ethereum, the network can promote growth and growth of usage organically.
Utility-Driven Expansion Could Propel ETH to the Target
With the ten-year anniversary of the Ethereum mainnet this year, Berckmans insists that the network has traveled a great distance but has much further ahead of it.
Ethereum is the most capitalized blockchain by application, but it will have to scale dramatically if it is going to become the dominant one on the planet. A strategic shift toward real-world builder culture and economic growth efforts will be required.
Berckmans insists that Ethereum is not suffering from a problem of value accrual but rather one of growth. Growth is something the network must prioritize, which will naturally propel high fees with increasing usage.
By keeping utility at the center, ETH can position itself as the leading blockchain, ensuring that ETH hits its full potential and reaches the $20,000 level.
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