Ethereum’s Valuation Insights
According to Ki Young Ju, CEO of the crypto analytics platform CryptoQuant, Ethereum’s digital currency, Ether, is perceived as undervalued based on the results of 12 frequently used valuation frameworks. These models collectively suggest a “fair price” for ETH at approximately $4,836, representing a significant increase of over 58% from its current trading values.
Reliability Assessment of Valuation Models
Each model underwent a reliability assessment, where they were graded on a scale of one to three—three being the highest reliability rating. Notably, eight of these models received a score of at least two, affirming their credibility. Ju emphasized that these frameworks were developed by reputable experts from both the academic sphere and the traditional financial sector.
Specific Valuation Models
One specific model, known as the App Capital valuation framework, factors in various on-chain assets, including stablecoins, ERC-20 tokens, and non-fungible tokens (NFTs), and estimates ETH’s fair market value at around $4,918. Meanwhile, leveraging Metcalfe’s Law—which posits that a network’s worth escalates with the square of its active users—places Ethereum’s valuation even higher at $9,484, indicating an astounding potential undervaluation of over 211%.
Furthermore, utilizing the Layer-2 (L2) valuation model, which measures the total value locked within Ethereum’s layer-2 scaling ecosystem, suggests a price point of $4,633 for ETH, marking a 52% undervaluation.
Community Discord and Alternative Perspectives
Despite the favorable projections indicated by most valuation models, there remains ongoing discord within the Ethereum community regarding the appropriate methodologies for assessing the value of digital assets and decentralized networks. Some experts argue that conventional valuation techniques fail to accurately capture the nuances of emerging blockchain technologies.
Contrary to the overall optimistic sentiment, however, one particular model, Revenue Yield, presents a starkly different perspective. This model suggests that with Ether’s current valuation exceeding $3,000, it is actually overvalued by more than 57%. According to this framework, the fairest price for ETH would be roughly $1,296, reflecting concerns over declining revenue as transaction fees plummet and competitors begin to take a share of its market.
