Ethereum (ETH/USD) – Ethereum is ‘Blue Chip Blockchain’, Could See Significant Value Appreciation: Canaccord Analysts
Cryptocurrency Ethereum ETH/USD and the ecosystem for smart contracts was dimensioned accordingly Canaccord Genuity in a new note. Here’s a look at where analysts Michael Graham and Joseph Vafi see future value in them.
Fifth Wave of Computing: Web1 offered the opportunity to consumer data with companies such as Google and Yahooaccording to the report, while Web2 offered the ability to produce content.
“Web3 is immutable individual ownership of content, data and assets, enabled by trust becoming a data primitive built into networks using blockchain technology,” the analysts said.
Graham and Vafi focused on Ethereum, the second largest cryptocurrency by market capitalization and the leader in non-fungible tokens (NFTs).
“Ethereum has established itself as the blue-chip blockchain network that drives this trust dynamic … the wider internet will likely pay Ethereum handsomely for this service.”
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The analysts said blockchain is the fifth wave of computing, following mainframes (1957 to 1964), personal computers (1975 to 1984), the Internet (1989 to 1993), Bitcoin and Ethereum (2009 to 2015).
Smart contracts, a term coined in 1994 by computer scientists Nick Szabo, are referred to as the building blocks of the blockchain.
“Ethereum is the first-mover and scaled incumbent in the world of smart contract blockchains,” the analysts said.
Related link: How to buy Ethereum
Areas for growth: The report debunked the belief that Web3’s momentum is “past critical mass”.
“Ethereum will likely continue to evolve into a foundational technology that drives this movement, and that ETH tokens therefore have a strong potential to experience significant value,” according to Graham and Vafi.
Key areas of growth for Ethereum include building a better internet, DeFi, DAOS, NFTs and the Metaverse.
A large part of the report highlights NFTs, which have increased in popularity over the past two years and whose space is currently dominated by Ethereum, as an overview shows:
- Ethereum: $29.6 billion
- Ronin: $4.1 billion
- Solana: $2.6 billion
- Power: $1.1 billion
- Polygon: $789.7 million
While Axie Infinitywhich uses the Ronin Network, has the lead for NFT sales volume of $4.25 billion, Ethereum ranks second, third, fourth, fifth and seventh for projects based on sales volume.
Ethereum NFTs are also among the top NFTs by market cap, with CryptoPunks with a peak value of $2.25 billion and 10% of the total market size. The other top ETH-based NFTs by market cap include:
- Bored Ape Yacht Club: 6%
- Art blocks: 4%
- Otherdeed for Otherside: 4%
- Mutant Ape Yacht Club: 3%
- Meebits: 3%
- CloneX: 2%
- The sandbox: 2%
- Moonbirds: 2%
Merge After Effects: The Ethereum merger, which will take place between September 10 and September 15, is seen as a move that could make the cryptocurrency “more efficient and more widely available,” according to the note.
The use of smart contracts can help power microtransactions and new areas in smart and efficient ways, the analysts said.
“A smart contract can do anything a computer can do, running everything from simple gaming apps to creating and tokenizing stocks, bonds and other real-world assets, forming complex banks or casinos, depending on your perspective.”
The report compared this with Amazon.com Inc‘s AMZN cloud service offering, Amazon Web Services (AWS).
“AWS sells computing power, often in microquantities, to other types of end-user applications. AWS is booming whether the demand for cloud computing comes from streaming media or AI-powered business software.”
Graham and Vafi did not provide a price target for Ethereum, but used several models to calculate potential values — including a discounted cash flow model (often used to analyze a public company) that sees a value of $11,953 for ETH.
ETH price action: Ethereum traded up 0.47% to $1,642.88 at the time of writing, according to data from Benzinga Pro.
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