By
Godfrey Benjamin
June 28th, 2024
In their research note, VanEck analysts noted that ETH can be thought of as ‘Digital Oil’ because it is consumed by engaging in activity on Ethereum.
US investment firm VanEck, one of the applicants for the spot Ethereum ETF, recently stated that they have raised the Ethereum (ETH) price target to $22,000 by the year 2030. VanEck admits that the reason behind this bullish outlook is the upcoming arrival of the spot Ethereum ETF ahead of this year.
The investment giant, along with several other Wall Street firms, has submitted applications for the spot Ether ETFs, currently under the SEC’s review. While the US SEC has approved the 19b-4 filings for most of the applicants, it’s still reviewing the S-1 registrations. In a recent research note, VanEck analysts Matthew Sigel, Patrick Bush and Denis Zinoviev wrote:
“We anticipate that spot ether ETFs are nearing approval to trade on US stock exchanges. This development would allow financial advisors and institutional investors to hold this unique asset with the security of qualified custodians, and benefit from the pricing and liquidity advantages characteristic of ETFs.”
As per the report from K33 Research, the spot Ether ETFs could see inflows to the tune of $4.8 billion within the first five months of listing. This could easily propel the ETH price to $5,000 and new all-time high levels.
Ethereum Network Growth
The report suggests that the Ethereum network is poised to sustain its swift expansion in market share, attracting not only traditional financial market participants but also an increasing number of Big Tech companies.
With this trajectory, and if it maintains its leading role among smart contract platforms, the report envisions a plausible scenario wherein token holders could generate approximately $66 billion in free cash flow, thus supporting a valuation of $2.2 trillion for the asset. This projection could potentially lead to a value of $22,000 per coin by the year 2030.
Note that the $22,000 price prediction for Ethereum (ETH) is the base case. On the other hand, the bullish and bearish price predictions are $154,000 and $360 respectively. “We believe ETH is a revolutionary asset with few parallels in the non-crypto financial world. ETH can be thought of as ‘Digital Oil’ because it is consumed by engaging in activity on Ethereum,” the authors also wrote.
In the last four years, the total number of users in the Ethereum ecosystem has also surged by 9x. Based on data gathered by crypto ETF issuer Bitwise, Ethereum and its scaling solutions Arbitrum and Polygon collectively averaged over 250,000 daily active users in Q1 2020. The majority of these users were attributed to the Ethereum layer-1 mainnet.