ETH price is seriously undervalued, citing on-chain data indicating that ETH is trading far below a fair price
Some analysts believe that the ETH price is severely undervalued. Moreover, evidence on the chain also shows that ETH is trading much lower than the fair price.
ETH price is undervalued
As AZCoin News reported, the level of interest in ETH has risen sharply, though the price is not high. The proof is the number of ETH holders with more than 100 ETH has now reached 47,722, which is a new ATH.
? #Ethereum $ETH Number of Addresses holding 100+ coins just reached an ATH of 47,722.000
Previous ATH of 47,714.000 was observed on 21 May 2020
View metric:https://t.co/FbjiMG3uFX pic.twitter.com/KmTnNLEORt
— glassnode alerts (@glassnodealerts) May 22, 2020
According to Mythos Capital founder Ryan Sean Adams, over the past four years, ETH prices have been closely correlated with the transaction fees that Ethereum users pay to process their transactions. However, due to the congested Ethereum network, transaction fees began to skyrocket, but the price of ETH stood still. If these two factors are well correlated, the ETH price is likely to increase by at least 50%.
ETH Price Vs Ethereum Blockspace Fees
Adams said:
“I expect Ethereum to develop into a store-of-value network in the coming years.”
If this is achieved, it will see ETH begin to trade above the transaction fees relationship indicated above.
Moreover, this hope can be trusted when Ethereum 2.0 is about to be released. According to information from Ethereum developers, this update will be available soon by the end of 2020, around July or August 2020.
So, should we all-in ETH?
Crypto-centric venture investor and professor Adam Cochran once revealed that ETH 2.0 is likely to be the biggest economic change in society for three core reasons:
The introduction of staking will dramatically drive up demand for ETH by long-term retail and institutional holders. Staking will reduce the inflation of the cryptocurrency’s monetary base.
Due to the technical improvements ETH 2.0 brings, demand for the cryptocurrency will rise dramatically.
Cochran stated:
“With the release of ETH 2.0, we cant going to see ETH drastically increase its tx / s and therefore its commercial and consumer viability.”
However, that is the view of Cochran alone. Because according to Michael Novogratz, Galaxy Digital CEO, Ethereum is still in the proof phase. Synonymous Ethereum is still a venture bet because of its relative nascency and market size.
The uncertainty surrounding the 2.0 upgrade also affects the effectiveness of ETH. While all these confirmations may be reliable, they are unlikely to prevent ETH from rallying in the short and medium-term if buyers enter the market.
ATM I am more bullish on $BTC.
We are observing the ETH2.0 transition closely to understand the crypto economic implications and impact on $ETH price.
At some point, we may turn more bullish on $ETH. It is a big event but at the moment there is considerable uncertainty.
— SpartanBlack (@SpartanBlack_1) May 22, 2020
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Read more:
- ETH Price Has Been Able To Maintain Above $200 Despite The Recent Turbulence Seen Within The Aggregated Crypto Market
- So Many Factors That Suggest ETH Price Is About To Snap This Long-Held Bout Of Consolidation And Spark A Massive Movement