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Due to rising demand, VanEck predicts that the Ethereum price will reach the $22,000 milestone by 2030. Will this forecast prove?
On June 5, VanEck, a popular global investment and asset management firm, made a bold projection regarding the price of Ethereum (ETH), suggesting that it could reach $22,000 by 2030.
VanEck Ether’s prediction is underpinned by the growing demand for the asset, a trend expected to drive its value to unprecedented heights in the coming years.
We've raised our 2030 ETH price target to $22K, influenced by ether ETF news, scaling progress, and our read of onchain data. Additionally, we've analyzed how ETH and BTC perform in both traditional and crypto-only portfolios for optimal returns. @Matthew_Sigel @Patrick_Bush_VE…
— VanEck (@vaneck_us) June 5, 2024
VanEck Ethereum Prediction Relies on ETF Approval
In a recent blog post, VanEck’s head of digital assets research, Matthew Sigel, argues that the growing demand for Ethereum and the anticipated approval of spot Ether ETFs are key factors for his firm’s optimistic Ethereum forecast.
The approval of spot Ether ETFs would allow financial advisors and institutional investors to hold Ethereum in their portfolios, benefiting from the pricing and liquidity advantages of a spot ETF.
VanEck analysts project Ethereum’s 2030 valuation based on a forecast of $66 billion in free cash flows generated by the network and accruing to the ETH token.
Notably, the Ethereum ecosystem has experienced a remarkable increase in active users over the past four years. Daily active users have increased ninefold since 2020.
According to the data report compiled by crypto ETF issuer Bitwise, the Ethereum ecosystem, including its layer-1 mainnet and layer-2 scaling solutions such as Arbitrum, Polygon, Optimism, Base, and zkSync, had an average of over 2.25 million daily active users in the first quarter of 2024, compared to just 250,000 in Q1 2020.
This significant growth in user activity aligns with VanEck Ether’s predictions.
The ETH price forecast also detailed that ongoing scaling advancements are expected to boost the network’s efficiency and capacity.
On May 29, Ethereum co-founder Vitalik Buterin disclosed using layer-2 solutions to scale the main blockchain. He believes layer-2 scaling can help cultivate diverse “subcultures” within the Ethereum ecosystem, promoting growth and innovation across different sectors.
#Ethereum rally is just one breakout away: pic.twitter.com/PFKI9CUFv6
— Yoddha (@CryptoYoddha) June 6, 2024
Meanwhile, the community appears optimistic about ETH’s future, as noted by a well-known trader, Yoddha, who remarked that Ethereum’s rally is just one breakout away.
While crypto communities eagerly anticipate the listing and trading approved spot Ether ETFs, hoping to spark a bull run for ETH prices, the US SEC chair has remained vague about the timeline for such developments.
VanEck Ether Prediction Likens Ethereum to the new “Digital Oil”
The VanEck forecast on Ethereum presents an appealing investment case for Ethereum, referring to it as “digital oil” due to its role in supporting numerous decentralized applications (dApps), smart contracts, and overall revenue generation.
Compared to Web2 applications, Ethereum ($3.4B) generates more revenue than Etsy ($2.7B), Twitch ($2.6B), and Roblox ($2.7B). It also boasts more monthly active users (20M) than Instacart (14M), Robinhood (10.6M), and Vrbo (17.5M).
The ETH price report also categorizes Ethereum as a platform business akin to the Apple App Store or Google Play. However, Ethereum holds a major advantage over traditional Web2 platforms by offering unique value propositions to its users and app business owners that are unavailable outside the crypto space.
One of the most attractive aspects of using Ethereum is its potential cost savings for businesses and users. While Apple and Google take about 30% of hosted application revenue, Ethereum currently extracts around 24% (14% for non-DeFi apps).
VanEck predicts that Ethereum’s take rate will drop to 5-10% over the next 18 months as activity shifts to less-expensive Ethereum Layer-2 Blockchains, which currently have take rates of 0.25-3%.
