VanEck analysts have explained in detail why ETH price could rise above $11K by 2030, with revenue of more than $50 billion.
According to a VanEck report, the Ethereum (ETH) price could hit $11.8K by 2030. The global investment manager exposited its ETH price predictions earlier in the month.
On May 9th, VanEck’s Digital Assets Research Head, Matthew Sigel, and Digital Assets Senior Investment Analyst Patrick Bush made the bold claims. The duo provided a detailed valuation methodology incorporating cash flow projections and fully diluted valuation calculations to support their argument.
At the time, Sigel and Bush explained that their Ether price claims were updated following the recent hard fork. According to the VanEck analysts, the projected 2030 ETH price increase could also push annual revenue from $2.6B to $51B. Furthermore, the duo said their price predictions assume a 70% smart contract protocol for the popular digital currency. This projection was discounted to $5.3K at a 12% capital cost derived from Ethereum’s recent beta. Furthermore, Sigel and Bush assessed the altcoin’s market capture across critical sectors. They also explored its store-of-value potential in the crypto space. According to analysts, ETH’s new proof-of-stake status could see the crypto rival US T-bills.
VanEck Methodology Used to Ascertain ETH 2030 Price
VanEck’s analysis assessed ETH’s price value by estimating cash flows for the year ending on April 30th, 2030. The crypto’s price valuation methodology also involved a series of calculations to arrive at a cash flow figure. One of these was accounting for global tax rate deductions,
Meanwhile, to get ETH’s 2030 fully diluted valuation, analysts applied a long-term estimated cash flow yield of 7%, subtracting the long-term crypto growth rate of 4%. Lastly, the fully diluted valuation total is divided by the expected number of coins in circulation, with the result discounted by 12% to April 20th, 2030.
VanEck analysts also acknowledged ETH system transaction fees and Maximum Extractable Value (MEV) as a revenue line. Additionally, the firm’s analysts also asserted that the token is evolving beyond its traditional use cases of being a transactional currency or a consumable commodity. Although not quite on Bitcoin’s store-of-value level, Sigel and Bush opined that Ether could still become a store of value for human capital maximization purposes. The VanEck analysts also pointed out the perceived dynamism of ETH’s store-of-value applicability within and outside the Ethereum blockchain. According to the duo, the token’s value is versatile in securing applications, protocols, and ecosystems throughout the crypto space.
ETH Price Base Case Scenario
In a base case scenario, VanEck analysts assume Ether will achieve an annual revenue of $51B in the year ending April 30th, 2030. Furthermore, the duo deducted a 1% validator fee from the total and a 15% global tax rate to arrive at a $42.90B cash flow for the same period. Sigel and Bush also noted:
“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.”
Using the parameters above, VanEck’s analysts asserted that ETH’s base case discounted price, as of May 9th, was $5,359.71. The leading altcoin is currently changing hands at just over $1,900.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
