The second largest cryptocurrency Ethereum (ETH), managed to make a strong move above the $3000 level this week and outperformed Bitcoin overall. The ETH price is currently around $3100, and according to analysts, the ETH price has the power to increase further this year.
Bloomberg analyst Jamie Coutts believes that according to the discounted cash flow model, the ETH price could reach $6100 levels. The analyst noted that the Ethereum cryptocurrency has “a unique blend of equity, commodity and monetary characteristics.”
Coutts is also quite optimistic about the “Merge” of the execution layer and the consensus layer. This is a system that allows users to stake their ETH and monetize it. According to the operation of the system, 30% of Ethereum transaction fees will be distributed to its users who stake.
Therefore, increased demand in Ethereum will lead to higher fees and higher payouts. Based on its current performance, the Ethereum network is poised to generate $12.7 billion in fees in 2022.
Market analyst Ryan Allis, who also runs a cryptocurrency hedge fund, believes ETH market valuations will be worth $832 billion based on the discounted cash flow model. Stating that Ethereum transaction fees in January 2022 exceeded $ 1.3 billion, the analyst is quite assertive in this regard.
Allis also revealed that Ethereum’s total revenue in February 2022 was $715.4 million. According to this calculation, the annual income should be 8.58 billion dollars. According to the analyst’s estimation, the annual wagering reward will be around $1.4 billion. This would bring total annual revenue up to $9.98 billion. Allis also explained that net profit equals revenue, ie 100% profit, as no costs are associated with a distributed system.
Therefore, we can assume that ETH is trading at forward price-earnings multiples of 36.6. This looks pretty appealing given the multitudes that growth stocks are trading at. If we take a forward P/E ratio of 100, ETH price It could rise above the $8300 level.
Allis also predicts an annual revenue growth rate of 25% for ETH over the next 20 years. This means that the real value of ETH is around $7000.
Ethereum (ETH) Whales Keep Accumulating
The holdings of the top 10 Ethereum whales continue to rise and are once again approaching a 5-year high. On-chain data provider Santiment shared the following views on the subject:
“Ethereum’s top 10 whale addresses today hold 4.3% of the total supply compared to a year ago. 23.7% of all $ETH held by these wallets is very close to the 5-year highs it first breached at the end of January.”
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.