VanEck Research, led by Matthew Sigel and Patrick Bush, has revised the price target for Ethereum (ETH) to $11.8k by 2030. The revision is based on a new valuation model that considers various revenue streams and market dynamics associated with Ethereum’s ecosystem. The analysis utilizes cash flow projections and fully diluted valuation (FDV) calculations.
– The comprehensive evaluation by VanEck Research projects Ethereum’s price to reach $11.8k by 2030.
– The revised price target takes into account various revenue streams and market dynamics.
– The analysis utilizes cash flow projections and FDV calculations.
Ethereum’s revenue model is compared to a digital mall, housing various internet commerce activities. The valuation considers transaction fees, Miner Extractable Value (MEV), and an emerging revenue stream called “Security as a Service” (SaaS). The revenue projections estimate Ethereum’s network revenues to soar from $2.6 billion annually to $51 billion in 2030, assuming a dominant market share of 70% among smart contract protocols.
– Ethereum’s revenue model is similar to a digital mall.
– The valuation considers transaction fees, MEV, and SaaS.
– Revenue projections estimate significant growth in Ethereum’s network revenues.
The transaction revenue estimation focuses on smart contract platforms’ market capture in sectors such as Finance, Banking, Payments (FBP), Metaverse, Social and Gaming (MSG), and Infrastructure (I). The analysis suggests a shift in the relationship between platform and business revenues over time as off-chain businesses deploy on-chain to reduce costs and seek new revenues.
– The transaction revenue estimation considers smart contract platforms’ market capture in various sectors.
– The analysis predicts a shift in the relationship between platform and business revenues over time.
MEV, profits derived from transaction ordering within each produced block, is seen as an integral part of blockchain’s security mechanism. The analysis assumes a direct relationship between MEV and the value of assets on Ethereum. L2 settlement dynamics are viewed as the long-term scaling solution, with most revenue from L2s eventually accruing to Ethereum. A revenue item called “Security as a Service” (SaaS) is introduced, accounting for Ethereum’s security exportability to other ecosystems, applications, and protocols.
– MEV is considered an integral part of blockchain’s security mechanism.
– L2 settlement dynamics are seen as a long-term scaling solution for Ethereum.
– A revenue item called “Security as a Service” is introduced, recognizing Ethereum’s security exportability.
The base case scenario projects an ETH price of $11,848 by 2030, discounted to $5,359.71 as of April 30, 2023, at a 12% cost of capital. This assumes Ethereum becomes the dominant open-source global settlement network hosting significant portions of commercial activity across various sectors. Bear and bull case scenarios provide a wider range of price targets, considering uncertainties surrounding Ethereum’s future performance.
– The base case scenario projects an ETH price of $11,848 by 2030.
– Bear and bull case scenarios provide a wider range of price targets.
VanEck Research’s analysis provides a valuation methodology for Ethereum and explores its potential as a store-of-value asset in the evolving crypto landscape. VanEck has also announced the launch of its Ethereum Strategy ETF (EFUT), an actively managed fund focused on capital appreciation through investments in Ethereum futures contracts.
– The analysis provides a valuation methodology for Ethereum.
– VanEck has launched an Ethereum Strategy ETF for investments in Ethereum futures contracts.