{"id":552168,"date":"2023-09-20T21:00:19","date_gmt":"2023-09-20T21:00:19","guid":{"rendered":"https:\/\/uniquehot.com\/?p=552168"},"modified":"2023-09-20T12:38:10","modified_gmt":"2023-09-20T12:38:10","slug":"ethereum-fair-value","status":"publish","type":"post","link":"https:\/\/uniquehot.com\/news\/ethereum\/ethereum-fair-value\/","title":{"rendered":"Report Says Ethereum Is Trading Well Below Fair Value, What\u2019s The Correct Figure?"},"content":{"rendered":"
Ethereum\u2019s price may have been dealt a massive blow as a research report on the Ethereum valuation has revealed that the cryptocurrency giant has been trading below its fair price.<\/span><\/p>\n A new on-chain <\/span>research report<\/span><\/a> has delved deep into the fair value of the Ethereum cryptocurrency since its inception, segregating the cryptocurrency\u2019s value into sections and utilizing its trading activities and <\/span>active addresses<\/span><\/a> to evaluate the network\u2019s worth over the past years.\u00a0<\/span><\/p>\n Lewis Harland, an RxR analyst, revealed in the research report that Ethereum has been trading below fair value by a 27% discount. The analyst arrived at this conclusion after employing the Metcalfe law-centric valuation model which involves comparing active user base on Ethereum\u2019s robust scaling networks and active user adoption to measure the network\u2019s fair value.\u00a0<\/span><\/p>\n Harland explained that Ethereum\u2019s network valuation can be measured and tracked slightly more accurately when the active user base of the blockchain\u2019s scaling networks is integrated into the model. He stated that if the model excludes active user bases, then Ether’s (ETH) valuation would be trading significantly below its fair value of $275 billion.<\/span><\/p>\n \u201cEthereum\u2019s network valuation tracks the updated ML index better when the active user base of Ethereum\u2019s scaling networks is factored into the model than when omitted,” Harland, stated in the research report.<\/span><\/p>\n He added that \u201cthe updated model, which does factor in these networks, puts ETH\u2019s valuation at $275 billion (current MCAP trading at a 27% discount), assuming no further user growth in perpetuity.\u201d<\/span><\/p>\n Going by Harland\u2019s research, Ethereum should be trading at around $2,300 with a market cap of $275 billion. However, Ethereum\u2019s price is currently sitting at $1,637 with a market capitalization of $197.62 billion.\u00a0<\/span><\/p>\n <\/p>\n While exploring the <\/span>decline in Ethereum\u2019s trading value<\/span><\/a>, RxR disclosed its analysis of Ethereum\u2019s supposed value using value layers. The research firm explained that Ethereum\u2019s commodity value layer can be analyzed through the amount of ETH millions of users utilize to facilitate their crypto transactions daily.<\/span><\/p>\n It further stated that the annual run rate of the <\/span>transaction fees<\/span><\/a> is well over $1.6 billion presently. It also described Ethereum\u2019s equity value, stating that \u201cthe value of ETH is the present-day value of the sum of all of its future cash flows. To date, over 3.5m ETH ($5.8B) has been burned by EIP-1559.\u201d<\/span><\/p>\nEthereum Trading Value Slips<\/h2>\n
Analyst says ETH price is sitting 27% below fair value | Source: ETHUSD on Tradingview.com<\/a><\/pre>\n
Ethereum\u2019s Worth Revealed Through Value Layers<\/h2>\n