Ethereum potential not second fiddle to Bitcoin
Currently, there are more than 9,600 cryptocurrenciesbut in the big space there are two giants – bitcoin and ethereum, often referred to as ether.
As of noon Wednesday, bitcoin and ether had market capitalizations of $537.55 billion and $223.34 billion, respectively. The pair of digital currencies together account for nearly $761 billion of the total cryptocurrency universe’s market cap of $1.14 trillion.
Specific to ether, bitcoin often overshadows that asset. But a market value of $223 billion is still impressive. Not only does it show that ethereum adoption and investor confidence is growing, but if the cryptocurrency were a publicly traded company, it would be on the 27th.th-largest component of the S&P 500.
Not only is ether a credible member of the crypto universe, it has the potential for staggering long-term price appreciation.
Check out this Ethereum forecast
Ethereum is around $1,850. In the third quarter of 2015, investors could have snapped up the digital asset for less than $1 before it soared to its all-time high of $4,444 in late 2021. In other words, Ether already has a penchant for big moves. Some market observers believe more may be on the way.
IN a recent report, Matthew Sigel, VanEck head of digital asset research, and Patrick Bush, senior investment analyst at the firm, note that ethereum could rise to $11,800 by 2030. That’s a more than fivefold increase from recent prices. This means that the digital asset is undervalued today.
“We now see ETH network revenue rising from an annual rate of $2.6B to $51B in 2030. Assuming ETH takes a 70% market share among smart contract protocols, this implies a token price of $11.8k in 2030, which we discount at $5.3k today at a 12% cost of capital taken from ETH’s latest beta,” the VanEck duo wrote.
As the analysts note, there is an actual business model associated with ethereum. It’s something the bulk of the cryptocurrency space is missing. While ethereum itself is not a business, it generates revenue as more tokens (ether) are used in secure Ethereum applications.
It is a positive feature, as is the asset’s development. And that may be a key component in the aforementioned expectations of price increases.
“We argue that ETH is evolving beyond a transactional currency or a commodity like oil or natural gas. We believe that ETH, while not a complete store of value like Bitcoin due to Ethereum’s demonstrated mutability of code and an evolving social consensus focused on utility, will nevertheless become a store of value for state actors seeking to maximize human capital (vs. Bitcoin, which maximizes for stranded energy),” Sigel and Bush concluded.
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The opinions and forecasts expressed herein are solely those of Tom Lydon and may not materialize. Information on this website should not be used or construed as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.
