VanEck, a global investment manager, predicts that the price of the leading altcoin Ethereum will reach $11,800 by 2030. Moreover, it predicts that it will rival US Treasury bonds. VanEck’s valuation analysis takes into account various factors such as transaction fees, miner extractable value (MEV) and Ethereum’s market share in key sectors.
VanEck forecasts record increase for leading altcoin!
Global investment manager VanEck predicts that the Ethereum (ETH) price will rise to $11,800 by 2030. It also positions the cryptocurrency as a formidable competitor to US Treasury bonds. VanEck has published a report with analysis that supports these predictions. The report, penned by VanEck’s head of digital assets, Matthew Sigel, and research senior investment analyst Patrick Bush, provides an in-depth analysis of Ethereum’s potential. It also outlines the valuation methodology the firm uses.
Ethereum’s revenue projection and cash flows
According to VanEck’s projections, the average annual revenue generated by the Ethereum network is expected to rise from $2.6 billion to $51 billion by 2030, assuming Ethereum maintains a 70% market share among smart contract protocols. This increase in revenue will result in an estimated $42.90 billion cash flow to Ethereum after accounting for validator fees and global tax rates.
Target price and discount for the leading altcoin
As a result of this comprehensive analysis, VanEck set a base price target of $11,848 per Ethereum token by 2030. However, to account for the time value of money, the target price has been discounted to the current price of $5,300, taking into account the 12% cost of capital from the last beta version of Ethereum.
Ethereum’s scalability upgrades and cost reductions
VanEck’s report comes at a time when Ethereum is undergoing significant upgrades to improve its scalability. cryptocoin.com As we reported, one such upgrade, EIP-4844, often referred to as “proto-danksharding”, aims to address scalability concerns and is scheduled to be implemented in the second half of Q3 or first quarter of Q4 in 2023 during the Deneb-Cancun upgrade.
Experts expect the rollout of EIP-4844 to significantly reduce the costs associated with using Ethereum Layer-2 solutions. It is possible for these cost reductions to reach levels up to 100 times lower than current fees. In this case, it is possible that the amount of Ethereum burned will temporarily decrease due to declining fees. However, he predicts that the overall growth in Ethereum’s economic activity will enable increased value accumulation over the medium term.
VanEck’s comprehensive report and valuation methodology provides valuable insight into Ethereum’s potential for a lucrative investment. It also demonstrates its character as a store of value. The projections point to a significant increase in Ethereum’s revenue and market share. Investors and enthusiasts will likely be keeping a close eye on the cryptocurrency’s progress in the years to come.
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