VanEck, a US asset manager in charge of a $69 billion exchange-traded fund (ETF), predicts that Ethereum’s (ETH) recent hard fork, which allows users to withdraw staked Ether, would position the cryptocurrency as a strong competitor against the US government bills in the future years.
In light of this, and the fact that ETH is predicted to make up 70% of smart contract protocols, VanEck has predicted that the price of the second biggest cryptocurrency in the world would reach $11,800 in 2030.
“We use a 12% cost of capital drawn from ETH’s current beta, which brings the token price down to $5,300 in light of the following scenario: Assuming ETH takes a 70% market among smart contract protocols, this indicates a token price of $11,800 in 2030.”
VanEck predicts that the price of Ethereum will climb by 531% from its present level by the year 2030. According to VanEck, Revenues from the ETH network may reach $51 billion by 2030, up from an annual rate of $2.6 billion.
VanEck said the most recent price estimate was based on projected cash flows and fully diluted valuation (FDV) numbers. The fund manager carefully considered Ethereum’s cash flow projections for the fiscal year ending April 30, 2030.
The fund manager estimated Ethereum revenues and subtracted a worldwide tax rate and a validator revenue reduction to calculate cash flow. Then, VanEck said it employed several different projections, such as a 7% projection for future cash flow minus a 4% projection for future crypto growth.
Finally, the investment calculated the FDV in 2030 by taking the projected number of tokens in circulation at that time and dividing it by a discount rate of 12%.
At the time of writing, the going rate for ether was $1,870, down 1.82% from the previous day. Although it has gained 55.8% this year, the cryptocurrency has dropped by more than 6.2% in the last month.
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