Investment firm VanEck has recently released a report detailing the potential future price movements of Ethereum, the second-largest cryptocurrency by market cap. The report outlines three possible scenarios for Ethereum's price trajectory, with the baseline prediction suggesting a breakthrough to $22,000 by the year 2030.
According to the experts at VanEck, the considerable increase in Ethereum's price could be spurred by the anticipated launch of spot exchange-traded funds (ETFs) based on Ethereum, as well as significant advancements in scaling the ecosystem. "We expect that spot Ethereum ETFs are nearing their launch on stock exchanges in the U.S. This would allow financial advisors and institutional investors to store the asset with qualified custodians, benefiting from changes in price and liquidity," stated VanEck representatives.
The firm has revised its financial model in light of these developments, highlighting an increased investment appeal of Ethereum (ETH). VanEck believes that the ecosystem will continue to expand with the involvement of major traditional financial entities and technology companies.
The report considers various factors, including the volume of free cash flows, to outline three price formation scenarios for Ethereum over the next six years. In the baseline scenario, the asset's value is projected to rise to $22,000. This assumes that the ecosystem will increase its market share of smart contracts to 70%, with a total supply of 100.07 million ETH.
In the "bullish" scenario, Ethereum is expected to assume a dominant position in the smart contract market, capturing 90% of the market share. The total supply would then decrease to 98.85 million ETH, and the price could potentially soar to $154,000 according to VanEck's forecast.
Conversely, in the "bearish" scenario, Ethereum may lose its leading position as its market share of smart contracts could drop to 15%. Meanwhile, the asset's supply could increase to over 115 million ETH, leading to a projected price of just $360.
VanEck's report describes Ethereum as a "revolutionary asset" with few equivalents in the non-cryptocurrency financial world. It can be viewed as "digital oil" due to its utilization in network activities, or as "programmable money" because the financialization of ETH and other Ethereum-based assets can occur automatically on-chain, without any intermediary or censorship.
Earlier, we covered K33 Research's forecast about the influx of capital into spot Ethereum ETFs following their trading commencement. According to their assessment, it might reach $4.8 billion in the first five months.
This is expected to lead to a reduction in supply, bolstering the confidence of analysts in a significant price increase for Ethereum by the end of 2024.
