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- Ethereum (ETH) could have a base case price target of $11,848.62 and a bull case of $51,000 according to VanEck.
- However, the asset could fall to as low as $343.29 in a bear case.
Ethereum (ETH), the second largest crypto by market cap, has been tipped to go as high as $51,000 in seven years. In a new research report that focuses on the base, bear, and bull case of the digital asset, Global investment manager VanEck observed the performance of Ethereum when certain conditions are met.
This prediction was made based on the possibility that Ethereum becomes the largest open-source global settlement platform.
We base these estimates on the thesis that Ethereum becomes the dominant open-source global settlement network that hosts substantial portions of the commercial activity of business sectors with the highest potential to gain from moving their business functions to public blockchains. In a portfolio of similar smart contract platforms, we assume to own a collection of call options, with the dominant platform likely to take a majority market share.
Once it becomes the top settlement system or smart contract platform, there is a high possibility that the base case price target would be $11,848.62. In a bull case, the price would target $51,006.
However, things could go bad if it no longer becomes the top settlement system. The report estimates that a 15 percent dominance of Ethereum in this regard could send the price down to $343.29 in the bear case.
Ethereum is beyond transactional currency
One interesting observation by the researchers is that Ethereum has evolved over the years to establish itself beyond a transactional currency or a consumable commodity to become a store of value assets. This makes it similar to Bitcoin, however, operates a little differently.
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 asset for state actors looking to maximize human capital (vs. Bitcoin, which maximizes stranded energy).
This prediction is quite interesting, but far lower than Ark Invest’s Cathie Wood’s prediction. Last year, she predicted that Ethereum could reach a $20 trillion market cap by the year 2030. Decentralized finance is gaining traction, and could be a catalyst for Ethereum to displace many traditional financial services according to Cathie Wood as reported by Markets Insider.
The second-largest cryptocurrency, according to Ark Invest, will meet or surpass a $20 trillion market capitalization by 2030. Each coin would be priced at around $170,000-$180,000. Based on its current price of about $2,480, ether would have to jump by about 7,200% to meet the firm’s target. As financial services move on-chain, decentralized networks are likely to take share from existing financial intermediaries.
Just recently, Ethereum announced one of its biggest upgrades, the Shapella upgrade, which enables users to unstake or withdraw their staked ETH. However, its constantly rising gas fee is becoming a major challenge and would need to be addressed for the asset to surge to these predicted price points.
The market sentiment around ETH is currently bullish and has surged by 5.61 in the last seven days to trade at $1,903.45.
