There are always fantastic price forecasts from all corners of the community for various cryptocurrencies. However, how the actual value of a coin or token is measured remains a mystery to many. It is all the more important when professional analysts from the institutional sector dare to make a forecast. Just like Matthew Sigel and Patrick Bush recently. Both are analysts in the field of digital assets at VanEck, one of the largest asset managers worldwide. Together they worked out in one report three scenarios for the future performance of Ethereum (ETH), the coin of the second largest blockchain by market capitalization.
Moderate Variant – ETH at $11,800
The two analysts’ valuation method is based on estimates of income from fees and other cash flows, as well as calculations for the fully diluted valuation of Ethereum. A crucial game changer for the blockchain is the recent Shapella upgrade, which caused massive de-risking in Ethereum’s staking sector. As a result, VanEck sees network revenue increasing from $2.1 billion to $51 billion by 2030. Assuming Ethereum has a 70 percent market share among all smart contract protocols, the analysts calculate one for 2030 implied price of $11,800 per coin.
This is VanEck’s conservative forecast. Depending on which assumptions are made about future income and discount factors, further scenarios can be listed, which VanEck has roughly summarized in a table.
Ethereum – Bullish and bearish fall
The moderate variant alone would mean a more than six-fold price increase for Ethereum. But Sigel and Bush also warn of caution. One of the biggest hurdles for Ethereum (and the crypto sector in general) is the current hostile attitude of the US authorities, especially the SEC. With its current regulatory style, the Securities and Exchange Commission has ensured that institutional crypto investments in the USA have come to a virtual standstill. So sigel in one Interview with Bankless.
However, Ethereum’s revenue from network fees depends on increasing adoption of the blockchain. VanEck assumes that a certain proportion of banking and finance could be processed on Ethereum by 2030. However, if regulatory attitudes towards cryptocurrencies remain hostile, network revenues could stagnate at today’s levels over time. In the worst case, the analysts then consider a price of only 343 US dollars possible.
The optimistic scenario is in complete contrast to this. The assumption here is that 10 percent of finance, metaverse and media, and tech infrastructure will move on-chain. If Ethereum maintains its status as the dominant Layer 1 platform with an assumed 70 percent market share, VanEck will arrive at a price of $51,000 per coin in 2030. Ethereum’s annual revenues would then be $136 billion. By the way: if you discount the conservative forecast of 11,800 US dollars, today’s Ethereum price would be around 5,300 US dollars, according to VanEck.