The world of cryptocurrencies is known for its diverse forecasts emanating from various corners of the community. However, determining the actual value of a coin or token remains a mystery for many. Hence, forecasts from professional analysts in the institutional sector gain significance.
Recently, Matthew Sigel and Patrick Bush, analysts in the Digital Assets division at VanEck, one of the world's largest asset managers, collaborated on a report outlining three scenarios for the future performance of ETH, the coin of the second-largest blockchain by market capitalization.
Their valuation method is based on estimates of revenue from fees and other cash flows, along with calculations for Ethereum's fully diluted valuation. A significant game-changer for the blockchain was the recent Shapella upgrade, which resulted in massive ""de-risking"" in Ethereum's staking sector.
VanEck projects an increase in network revenue from $2.1 to $51 billion by 2030. Assuming Ethereum maintains a 70% market share among all smart contract protocols, the analysts calculate an implied price of $11,800 per coin for 2030. This conservative forecast is accompanied by additional scenarios that VanEck roughly summarized in a table.
Source: vaneck.com
However, Sigel and Bush caution against complacency. One of the biggest challenges for Ethereum (and the crypto sector as a whole) is the current hostile attitude of US authorities, particularly the SEC. This stance has led to institutional crypto investments in the US virtually coming to a standstill.
Ethereum's revenue from network fees depends on increasing adoption of the blockchain. VanEck assumes that a certain portion of banking and financial transactions could be conducted on Ethereum by 2030. However, if the regulatory attitude towards cryptocurrencies remains hostile, network revenues could stagnate at current levels over time.
In the worst-case scenario, the analysts forecast a price of just $343. Conversely, the optimistic scenario assumes that 10% of the financial sector, as well as metaverse, media, and tech infrastructure, will be shifted on-chain. If Ethereum maintains its status as a dominant Layer-1 platform, with a presumed 70% market share, VanEck predicts a price of $51,000 per coin by 2030.
Ethereum's annual revenue would then reach $136 billion. Interestingly, if we discount the conservative forecast of $11,800, Ethereum's current price would be around $5,300, according to VanEck."
