New research by a cryptocurrency research firm based in Germany, Blockfyre, suggests that Ethereum is significantly undervalued. The study shows that the price of Ethereum has yet to keep up with the development of the network.
On May 26, the German analytics firm Blockfyre published an analysis of the development of four key metrics of the Ethereum blockchain. The progress of the metric means that Ethereum is significantly undervalued at its current price. These metrics include the use of gas, the development of the ecosystem, the mean dollar of investment age, and the balance of the miners.
1) We charted several progress indicators for Ethereum against its price development since its genesis.
Besides other factors, the following 4 indicators have caught our interest the most.
We feel comfortable to state that Ethereum is significantly undervalued at current prices pic.twitter.com/RezhESApZk
— Tixl Finance (@tixlfinance) May 26, 2020
Gas usage indicates Ethereum is significantly undervalued
According to Blockfyre, Etherum could be heading for a bullish run. In fact, daily gas usage on the network reached a new record high on May 23, reaching 16.67 billion. Gas usage is the most powerful indicator that the use of the network is being used at a very high rate.
Every time a user makes a transaction through any Ethereum-based Dapp, the gas is burned. The higher the gas usage, the higher the use of Dapps. For instance, interacting with NFT games or trading on Crypto Exchange Platforms. Indeed, all this activity is good at the price of Ethereum.
In addition , the development of the Ethereum ecosystem has remained consistently strong since 2018. This means that, despite the daily price of ETH, the development of power is still in progress. For example, DeFi products such as Uniswap and Balancer are popular Ethereum developers introducing new attributes, increasing the value proposition of Ethereum.
The average age of invested dollars
The average age of invested dollars on the Ethereum blockchain , and the ETH balances held by the validators are surging to record highs after bottoming during the crypto bubble two years ago. Additionally, the miner balances have multiplied twice since early 2018, as per the German analytics firm
According to Blockfyre co-founder, Simon Dedic:
“It’s really interesting that both miners and investors have been holding ETH since 2018. It seems like a majority agree that these prices are just not worth selling ETH.”
Furthermore, he says the price decline since the 2018 rally is contributed by ICO selling vast amounts of tokens for capital in dollars, as they continue building their products.