- According to a report by global investment manager VanEck, it is predicted that the price of ETH (Ethereum) will reach $11,800 by 2030, positioning Ethereum as a competitor to U.S.
- The analysis takes into consideration factors such as transaction fees, MEV (miner-extractable value), and “security as a service.”
According to a report by global investment manager VanEck, it is predicted that the price of ETH (Ethereum) will reach $11,800 by 2030, positioning Ethereum as a competitor to U.S. Treasury bonds. VanEck conducted a valuation analysis by discounting Ethereum at 12% to determine its present value, resulting in a base case valuation of $5,359.71.
The report, authored by Matthew Sigel, the head of digital assets, and Patrick Bush, a research senior investment analyst for digital assets, outlines VanEck’s comprehensive analysis and valuation methodology for Ethereum.
The analysis takes into consideration factors such as transaction fees, MEV (miner-extractable value), and “security as a service.” It also explores Ethereum’s market share across key sectors and its potential as a store of value within the growing cryptocurrency market.
VanEck projects that by 2030, the yearly average revenue of the ETH network will increase from $2.6 billion to $51 billion, assuming Ethereum controls 70% of the market for smart contract protocols
. Based on the researchers’ base case scenario, Ethereum would generate $51 billion in revenue in the fiscal year ending on April 30, 2030. After subtracting 1% for a validator fee and 15% for the global tax rate, the cash flows to Ethereum are estimated to be $42.90 billion.
As a result, VanEck arrives at a base-case price target of $11,848 per token by 2030. Taking into account a 12% cost of capital derived from Ethereum’s recent beta, this target price is discounted to a current price of $5,300.
Ethereum’s Economic Revolution: Preparing for a Transformative Shift
Ethereum’s EIP-4844, also known as “proto-danksharding,” aims to enhance Ethereum’s scalability as its primary objective. This protocol upgrade is planned to be implemented during the Deneb-Cancun upgrade, scheduled for the latter part of Q3 or the first quarter of Q4 in 2023.
According to insights from IntoTheBlock, the introduction of EIP-4844 is anticipated to significantly reduce the costs associated with utilizing Ethereum Layer 2 solutions. These cost reductions are projected to be at least 10 times lower and potentially even up to 100 times lower.
While the implementation of EIP-4844 may temporarily decrease the amount of ETH burned due to reduced fees on Layer 2 solutions, it is expected that the overall growth in Ethereum’s economic activity will lead to increased value accumulation in the medium term.
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