Leading global investment management company, VanEck, has predicted that the price of Ethereum (ETH) could reach up to $11,800 by the year 2030, with a revenue of more than $50 billion.
VanEck Predicts $11.8K ETH by 2030
In a recent official report, the investment firm stated that with expectations that ETH will take up to 70% of the market among smart contract protocols, the world’s second-largest cryptocurrency could hit the predicted target.
“Assuming ETH takes a 70% market among smart contract protocols, this implies a token price of $11.8k in 2030, which we discount to $5.3k today at a 12% cost of capital derived from ETH’s recent beta,” VanEck wrote in the report.
According to VanEck, this valuation is based on a cash flow projection and fully diluted valuation (FDV) calculations. VanEck arrived at its cash flow figures by estimating Ethereum revenues for the year that ended on April 30, 2030, and deducting a global tax rate and validator revenue cut.
VanEck’s projection for ETH is an optimistic one, considering that its current price hovers around $1,800. However, the investment management company’s FDV model takes into consideration the long-term growth prospects of Ethereum and the number of ETH in circulation. VanEck discounted the final value by 12%, which may suggest that the firm still believes there is some degree of market risk associated with this projection.
$51B in Annual Revenue by 2030
Furthermore, analysts at VanEck predicted that Ethereum will generate $51 billion in annual revenue by April 30, 2030, assuming a base-case scenario. After deducting a 1% validator fee and applying a 15% global tax rate, the projected cash flow for the same period comes to $42.90 billion, according to their calculations. In addition to this bullish forecast, VanEck stated that ETH would eventually become a competitor to US Treasury bonds.
“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,” the report stated.
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