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This article discusses the catalysts that could push the Ethereum price to $10,000 and potentially even higher in 2022. Ethereum (ETHUSD) is on track to finish 2021 with its best annual performance since 2017. As of December 28th, ETH has gained 430% year-to-date, lifting its market cap to $470 billion (approximately 50% of Bitcoin's $940 billion total value). The Rise of DeFi Ethereum's market dominance has increased to a three-year high of 20.2% in 2021, driven by the rise of the Decentralized Finance (DeFi) market. The nascent DeFi industry grew exponentially in 2021, with the majority of protocols using the Ethereum network. Ethereum's Total Value Locked (TVL) assets increased from $20 billion at the start of the year, to approximately $160 billion, around 60% of the $260b DeFi market. Source: Defillama New Challengers Enter the Arena Although the Ethereum price increased four-fold over the last 12 months, the network's high transaction fees (gas) due to increased usage has benefited several rival Layer-1s in 2021. Due to their lower transaction costs and higher throughput, so-called Ethereum-killers like Avalanche (AVAX) and Solana (SOL) have grown in popularity and price over the last year. Furthermore, TVL growth on Solana and Avalanche is outpacing Ethereum. However, Ethereum will undergo a fundamental change in 2022, which could help ETH pull away from the pack. Ethereum Price vs Avalanche/Solana What to Expect in 2022 ETH 2.0. Ethereum will transform from a proof-of-work (PoW) to a proof-of-stake (PoS) model in 2022, improving scalability and energy efficiency. As part of the move to proof of stake, the number of new tokens issued annually will decrease, meaning the network's tokenomics will become deflationary. Furthermore, Layer-2 scaling solutions like Polygon (MATIC) and Immutable-X (IMX) have enormous potential to improve Ethereum's efficiency and scalability. Institutional Adoption Institutional adoption will be a key theme in the year ahead. Defi, Non-Fungible Tokens (NFT's) and GameFi attracted massive investment from Venture Capital funds in 2021. Considering Ethereum's dominance and the impending upgrade, the network is perfectly positioned to benefit if more capital flows into the cryptocurrency ecosystem next year. What could go wrong? While improving fundamentals should lift the Ethereum price in 2022, there are potential risks. Much of the gains over the last year are a result of central bank policy. Due to the Covid pandemic, global central banks have kept interest rates at rock bottom and provided monetary stimulus to revive flagging economies, providing ideal conditions for risk assets. However, many nations are planning to tighten financial conditions in 2022, which may provide a significant headwind for the cryptocurrency market. Furthermore, cryptocurrencies have matured into a $2+ trillion asset class, meaning increased regulatory oversight is inevitable. But whilst a regulatory crackdown could cause volatility, it is necessary for cryptocurrencies to enter the mainstream. Therefore, we consider regulation as positive for the Ethereum price. Ethereum Price prediction 2022 Ethereum's prospects for 2022 are encouraging. Considering ETH gained 430% in 2021, a 155% increase to $10,000 next year is easily achievable. Furthermore, if ETH repeats this years' performance, the Ethereum price could reach $20,000 in 2022. Whilst we expect the cryptocurrency market to grow next year, volatility will likely remain high. Therefore, the Ethereum price could experience several large drawdowns in 2022. However, in our opinion, if the cryptocurrency market continues to grow, the Ethereum price could reach $10,000 in 2022. Disclaimer Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Trading cryptocurrencies carries a high level of risk, and may not be suitable for all investors. Before deciding to trade cryptocurrency you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. For more market insights, follow Elliott on Twitter.