Ethereum
Prediction: Ethereum Could Skyrocket to $22,000 by 2030
Ethereum continues to revolutionize the technology sector. But will it really be worth more than $2 trillion by 2030?
During the first six months of the year, Ethereum (ETH 1.48%) is up 50%. This corresponds exactly to the performance of Bitcoin (BTC -0.47%), also up 50%. At its current price of $3,500, Ethereum is near its all-time high of $4,891.
But perhaps the best is yet to come. Investment firm VanEck recently predicted that Ethereum could reach a price of $22,000 by 2030. This may seem overly aggressive, but VanEck has solid data to back up his prediction. So, will it be true or not?
The disruptive capacity of Ethereum
For the better part of the last decade, we have seen Ethereum disrupt the tech industry. Ethereum was the first smart contract blockchain platform. He pioneered entire sectors of the crypto world, such as non-fungible tokens (NFT) and decentralized finance (DeFi) – which had never existed before. VanEck is counting on Ethereum’s ability to remain a technology disruptor over the next five years to justify such a high valuation.
More importantly, VanEck sees Ethereum making further inroads into the finance, banking, and payments industries. And VanEck also sees Ethereum creating value in sectors ranging from blockchain gaming to artificial intelligence (AI). The key to disruption will be Ethereum’s ability to provide cheaper, faster, and better solutions than those currently available from market leaders.
The $15 Trillion Opportunity
This is where things get interesting, as VanEck digs into the numbers to estimate the total potential market opportunity (which he calls total addressable market, or TAM). This figure could reach $15 trillion. The lion’s share of this value ($10.9 trillion) will come from finance, banking and payments. And there is a growing market opportunity ($1.4 trillion) that could result from artificial intelligence.
The logic here is simple but powerful: Ethereum will continue to deploy disruptive solutions to capture market share from well-established incumbent operators. And the biggest effort will be in DeFi, where there is already a rich and vibrant ecosystem. Just think about how new decentralized cryptocurrency exchanges are gaining market share against centralized cryptocurrency exchanges such as Global Coinbase (PIECE OF MONEY -3.22%).
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When considering major future trends such as asset tokenization (which involves moving financial assets from the real world to the blockchain), it is possible to understand how big the DeFi opportunity could be. Cathie Wood of Ark Invest, for example, suggested that smart contract networks such as Ethereum could generate $450 billion in fees by 2030.
The new ETFs
And finally, there is the matter of new Ethereum spot ETFs. These recently gained approval from regulators and are expected to begin trading soon. Once they are, they could lead to a huge influx of new funds into Ethereum. VanEck now predicts that the impact of these new ETFs could be greater than that of spot Ethereum ETFs. spot Bitcoin ETFs.
However, this is very debatable. As one of the companies that will launch a spot Ethereum ETF, VanEck may be overestimating the potential impact of these ETFs. In comparison, JPMorgan Chase (JPM -0.32%) predicts that these new ETFs could attract just $3 billion in new investors. That’s about a tenth of what the new spot Bitcoin ETFs attracted.
$2 trillion in assets?
VanEck offers three different scenarios for the future value of Ethereum. In the base case, VanEck predicts a price of $22,000. In the bullish scenario, VanEck predicts a price of $154,000. And, in a bearish scenario, VanEck predicts that the price of Ethereum could collapse to as low as $360. Yeah !
This is a wide range of outcomes to work with, and is what makes investing in Ethereum potentially so risky. Yes, Ethereum could reach a price of $22,000, giving it a massive market cap of $2 trillion. But it could also lose nearly 90% of its value and be relegated to the dustbin of history.
Keep in mind that Ethereum is not the only blockchain tapping into this $15 trillion market opportunity. There are many other blockchain competitors, each promising cheaper, faster, and better solutions. So if you are considering investing in Ethereum, make sure you do your due diligence and understand the assumptions used to predict a price of $22,000.
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Dominique Basulto has positions in Bitcoin and Ethereum. The Motley Fool holds positions and recommends Bitcoin, Coinbase Global, Ethereum and JPMorgan Chase. The Mad Motley has a disclosure policy.