1. Ethereum Overview

1.1 The Origin and Development of ETH

Ethereum was proposed by Vitalik Buterin in 2013 and officially launched in 2015. Its uniqueness lies in the introduction of smart contracts, which enables decentralized applications (DApps) to run, forming an open, trustless computing platform.

1.2 The technical characteristics of Ethereum

1. Smart Contract: Automatically execute contract terms to improve transaction efficiency.
2. Decentralized Applications (DApps): can run without central authority.
3. The transition from Proof of Work (PoW) to Proof of Stake (PoS): Ethereum 2.0 improves security and scalability through a staking mechanism.

1.3 Comparison between Ethereum and Bitcoin

1. Purpose: Bitcoin is mainly used as a store of value, while Ethereum is a smart contract platform.
2. Transaction Speed: Ethereum transaction confirmation time is faster than Bitcoin.
3. Consensus mechanism: Bitcoin still uses PoW, while Ethereum is transitioning to PoS.

2. Overview of the Euro and Its Position in the Global Financial System

2.1 The Historical Background and Development of the Euro

The euro was officially launched in 1999 and became physical currency in 2002. Currently, the euro is the official currency of 19 EU countries.

2.2 Currency policy of euros

The European Central Bank (ECB) is responsible for formulating the monetary policy of the euro area, with the primary objective of maintaining price stability and intervening in the market through interest rate adjustments and policies such as quantitative easing.

2.3 The role of euros in international trade and investment

The euro is the second largest reserve currency in the world, playing a significant role in international trade, cross-border investments, and bond markets.

3. The factors affecting the price of ETH/EUR

The price of Ethereum against the Euro is influenced by a variety of factors, including both internal market mechanisms and external macroeconomic environment. The following are the main influencing factors:

3.1 Supply and Demand Relationship in the Cryptocurrency Market

ETH’s supply is affected by mining, burning mechanism (EIP-1559), and staking, while market demand is influenced by investor interest, DApps ecosystem, and institutional adoption. Specifically:

• Supply side: The supply of ETH is affected by the ETH 2.0 staking mechanism, with more ETH being locked up, reducing circulating supply, which may drive up prices.

• Demand side: The adoption of DeFi, NFT trading, and institutional investors determines the market’s demand for ETH.

• Destruction Mechanism: EIP-1559 introduces a transaction fee burning mechanism, reducing the total supply of ETH, thus affecting the price of ETH.

3.2 Regulatory Policies

The cryptocurrency market is significantly influenced by global regulatory policies, especially the regulatory trends in the European Union.

• EU MiCA Proposal: MiCA (Markets in Crypto-Assets Regulation) is the EU’s regulatory framework for crypto assets, affecting trading transparency and market stability.

• Central Bank Digital Currency (CBDC): The European Central Bank plans to launch a digital Euro, which may impact ETH liquidity in the European market.

•Taxation and Compliance: The taxation policies on cryptocurrencies vary among European countries, which can affect investors’ trading costs and holding intentions.

3.3 Ethereum Network Upgrade

Technological advancements in Ethereum directly affect the price of ETH, thereby impacting the ETH/EUR price.

•Ethereum 2.0 (The Merge): Proof of Stake (PoS) enhances network efficiency, reduces energy consumption, and boosts investor confidence.

•Layer 2 expansion (Rollups): Layer 2 solutions such as Arbitrum and Optimism reduce transaction costs, improve network scalability, and promote demand growth for ETH.

•Ethereum Shard (Sharding): Future upgrades will increase throughput, making Ethereum a more efficient global financial platform.

3.4 Global Economic Environment

The global macroeconomic situation has a significant impact on the price fluctuations of ETH/EUR.

• Inflation and interest rates: Interest rate adjustments by the European Central Bank and the Federal Reserve affect capital flows, with investors choosing between risk assets (such as ETH) and fiat currency (EUR).

• Financial crisis and hedging demand: During economic turmoil, some investors may view ETH as a safe-haven asset, while others may choose to switch to stable assets (such as the euro).

• The US Dollar Index (DXY): Since ETH is mainly priced in USD, a strong dollar is usually unfavorable for the price of ETH, indirectly affecting the ETH/EUR price.

3.5 Investor Sentiment and Market Speculation

Market sentiment has a direct impact on the ETH/EUR exchange rate fluctuations.

•FOMO (Fear of Missing Out): When market sentiment is high, investors buy a large amount of ETH, driving up the price.

• Panic selling: During a market crash, a large amount of ETH is sold off, leading to a significant price drop.

• Whale Behavior: Large holders of funds (whales) making large buy or sell orders can influence short-term market trends.

• Social Media Impact: Discussions and news on social media such as Twitter, Reddit, and Telegram may cause significant market volatility.

4. ETH/EUR Historical Data Analysis

Since its birth in 2015, Ethereum has gone through multiple stages of development in its price against the Euro, influenced by market sentiment, technological innovation, regulatory environment, global economic situation, and the overall cycle of the cryptocurrency market. The following is a major historical trend analysis of the ETH/EUR exchange rate.

4.1 Price Trend Analysis

2015-2017: The Initial Stage of Ethereum

• In 2015, Ethereum had just launched, with ETH at a very low price and relatively small trading volume.
• In 2016, the Ethereum network encountered the ‘DAO incident’, leading to a significant fluctuation in ETH price.
• In 2017, Ethereum was driven by the ICO (Initial Coin Offering) craze, and the ETH/EUR price soared, breaking through 300 euros.

2018: Market Adjustment and Bubble Burst

• In 2018, the cryptocurrency market as a whole entered a bear market, with the price of ETH plummeting from its peak.
• ICO regulation tightening, market confidence is hit, ETH/EUR price falls below 100 euros.

2019-2020: Steady Recovery and the Rise of DeFi

• In 2019, the price of ETH fluctuated in the range of 100-200 euros.
• In 2020, the DeFi (Decentralized Finance) ecosystem exploded, with Ethereum transaction volume surging and ETH price breaking through 400 euros.
• At the end of 2020, the Ethereum 2.0 staking mechanism went live, boosting investor confidence, and the ETH/EUR exchange rate further climbed.

2021: Historical Highs and Market Prosperity

• In 2021, the price of Ethereum has been driven by NFTs, DeFi, and institutional investors entering the market.
• The ETH/EUR price reached a historic high of about 3,500 euros in May 2021.
• In the second half of 2021, affected by global economic uncertainty, tightening regulation, and market adjustments, the price of ETH has fallen slightly.

2022-2023: Market fluctuations and Ethereum upgrade

• In 2022, the cryptocurrency market experienced a correction, and the ETH/EUR exchange rate fell below 1,000 euros.
• In September 2022, Ethereum completed ‘The Merge’ and officially transitioned to PoS. The market reacted positively, and the ETH price briefly rebounded.
• In 2023, market confidence is restored, and the ETH/EUR price fluctuates in the range of 1,500-2,000 euros.

4.2 Major market events that affect the ETH/EUR price

• 2016 DAO Incident: The Ethereum community experienced a hard fork due to a hacker attack, leading to short-term market volatility.
• 2017-2018 ICO craze: A large number of Ethereum-based ICOs drove the demand for ETH, but the market collapsed after stricter regulations.
• The rise of DeFi in 2020: DeFi protocols such as Aave, Uniswap, Compound, etc., driving demand for ETH and causing a significant price increase.
• 2021 NFT trading boom: Beeple’s work auction sets a record, NFT market explodes, ETH trading volume surges.
• 2022 upgrade to ‘merge’: Ethereum transitions from PoW to PoS, reducing energy consumption and improving security.
• 2023 macroeconomic impact: Fed rate hikes, inflation pressure, and other factors affecting the crypto market.

In conclusion, the historical fluctuations in the ETH/EUR price reflect the impact of Ethereum’s technological development, market trends, and the global economic environment. In the future, investors need to closely monitor market dynamics in order to make informed trading decisions.

5. ETH/EUR Price Prediction and Risk Warning

5.1 Optimistic Scenario (Probability 40%)

In an optimistic scenario, the Ethereum market will experience significant price growth driven by multiple positive factors. Key conditions triggering this scenario include the continuous inflow of ETF funds and the widespread adoption of Layer 2.

With the increasing global interest in Ethereum investment, ETF funds are expected to continue to flow into the Ethereum market. The influx of these funds will provide sufficient liquidity to the market, driving up the price of Ethereum. At the same time, the large-scale application of Layer 2 technology will significantly improve the performance and scalability of the Ethereum network. This will attract more developers and users to participate in the Ethereum ecosystem, further increasing the demand for Ethereum.

Based on these positive factors, we expect the price of Ethereum to experience significant growth in the coming years. By the end of 2025, the ETH/EUR price is expected to surpass €4,000, marking a significant increase from the current price. With the continued development of the Ethereum ecosystem and technological innovations, by 2027, the price of Ethereum is expected to challenge its historical high of €10,000. This price growth not only reflects the strong demand in the Ethereum market but also underscores its continually increasing importance in the global digital asset market.

5.2 Neutral scenario (probability 50%)

In a neutral scenario, the Ethereum price will show a relatively stable fluctuation trend. It is expected that in 2025, the ETH/EUR price will fluctuate within the range of 2,700€ - 3,800€. This price range reflects a relatively balanced market supply and demand relationship, as well as investors’ cautiously optimistic attitude towards the future development of Ethereum.

During this period, the Ethereum ecosystem will continue to develop steadily, with technological innovation and application expansion providing some support for prices. However, the market will also face some uncertainties, such as changes in the macroeconomic environment, adjustments in regulatory policies, etc., which may lead to price fluctuations within a certain range.

By 2026, with further market recognition of the value of ETH and the continuous improvement of the ecosystem, the price is expected to regress to around €3,500. This price level reflects a reasonable valuation of ETH in a neutral scenario and also reflects market confidence in its long-term development potential.

5.3 Risk Factors

Although the Ethereum market has huge potential for development, it also faces many risk factors that could have a significant impact on the ETH/EUR price.

Regulatory uncertainty is one of the primary risks facing the Ethereum market. The SEC’s ongoing debate over the classification of ETH has been a key focus of market attention. If the SEC classifies ETH as a security, it could trigger a series of regulatory measures, significantly impacting the development of the Ethereum market. For example, exchanges may need to comply with stricter regulatory requirements, the threshold for investor participation may rise, and market liquidity and activity could be suppressed, leading to drastic price fluctuations.

Technical delays also represent a risk factor that cannot be overlooked. The shard upgrade of Ethereum is a crucial step to improve its network performance and scalability. However, if the shard upgrade is delayed, it may put Ethereum at a disadvantage in competition with other blockchain projects, reducing its ecosystem’s competitiveness. This could trigger concerns among investors about the future development of Ethereum, leading to capital outflows and negatively affecting the price.

Note: Price predictions do not constitute investment advice, and there is a risk of price fluctuations in cryptocurrencies, so please invest cautiously!

6. ETH/EUR investment strategy

The ETH/EUR trading market is a highly volatile market, influenced by various factors such as the global economic situation, the development of the cryptocurrency market, and technological progress. Investors need to combine market analysis and investment strategies to reduce risks and optimize returns when participating in this market.

6.1 Investment Strategy

6.1.1 Long-Term Holding Strategy (HODL)

Long-term investors typically have a positive outlook on the technical development and ecosystem expansion of Ethereum, choosing to hold ETH for long-term gains.

• Target audience: Investors who believe in the future growth of ETH.
• Risk: Long-term market volatility may affect asset value, requiring strong patience and risk resistance.
• Expected returns: If the ETH ecosystem continues to grow, holding long term may bring high returns.

6.1.2 Short-term Trading Strategy

Short-term traders use market fluctuations for high-frequency trading to obtain short-term profits.

• Common methods:

• Day Trading: Buying and selling ETH within the same day to obtain short-term profits.

• Trend Trading: Holding positions in a market uptrend or downtrend until the trend reverses.
• Breakout Trading: Enter a trade when the price breaks through key support or resistance levels.

6.1.3 Hedging and Risk Management Strategies

Due to the significant volatility in the ETH/EUR market, investors should adopt hedging strategies to reduce risks.

• Stablecoin hedging: During market volatility, some investors convert ETH to stablecoins such as USDT, USDC, etc., to mitigate price fluctuation risks.
• Options hedging: Use ETH options to protectively buy or sell when the price falls.
• Diversified investment: In addition to ETH, you can also invest in BTC or other mainstream assets to reduce single market risks.

6.1.4 Arbitrage Trading Strategy

Arbitrage trading takes advantage of price differences between different exchanges or different markets to generate profits.

• Exchange arbitrage: buying low-priced ETH and selling high-priced ETH between different exchanges.
• Perpetual contracts and spot arbitrage (Cash-and-Carry Arbitrage): Shorting ETH in the futures market while longing ETH in the spot market to take advantage of market pricing differences.

Conclusion

ETH/EUR price has high short-term volatility: Due to market sentiment and global economic changes, ETH/EUR may experience significant fluctuations. Bullish in the medium to long term: If Ethereum’s technical upgrades go smoothly and institutional adoption increases, ETH may maintain a long-term upward trend. Breaking key resistance levels: If the ETH price surpasses historical highs, the ETH/EUR exchange rate may further rise. Investors need to closely monitor market risks and develop investment strategies rationally.