Ethereum Is Now Reportedly Undervalued – Here’s How Much It Should Be

According to the latest reports, it seems that Ethereum is now undervalued. Check out the latest data on how much it should cost below.

According to a report by Fidelity Digital Assets, the subsidiary of investment giant Fidelity Investments that focuses on cryptocurrency, Ethereum (ETH) is currently being sold at a discounted price.

The report, titled ‘Ethereum Investment Thesis’, states that with Ethereum’s current supply at around 120 million and annualized network fees exceeding $6.8 billion, the estimated price of ETH using a discounted cash flow model is approximately $2,090 – 28% higher than its current price.

Fidelity Digital Assets suggests that Ethereum’s value is linked to network activity and the fees it generates, which they predict will increase by double digits over the next seven years and reach over $20 billion in 2030.

“The value assigned to ether is more easily modeled following the network’s shift to proof-of-stake. Demand for block space can be measured via transaction fees. These fees are both burned or passed on to validators, thereby accruing value for ether holders.”

The same notes revealed the following as per the online publication the Daily Hodl:

“As a result, fees and ether value accrual should be inherently related over the long term. An increased number of Ethereum use cases creates greater demand for block space, which leads to higher fees and greater value and utility in the form of yield rewarded to validators.”

Regarding the risks that could hamper the fees generated on the Ethereum network, Fidelity Digital Assets says,

“The relationship between ether and the value it provides to network users may weaken if scaling technology erodes fee revenue unless volumes increase and offset this margin compression.”

At the moment of writing this article, ETH is trading in the red and the coin is priced at $1,629. Stay tuned for more juicy news from the crypto space.