Prominent asset management firm VanEck has released a new analysis on Ethereum, the second-largest crypto in the world. Following the approval of spot Ether ETFs on U.S. stock exchanges, the token has gained widespread traction across the broader financial market. Now financial advisors and institutional investors can hold Ether with the security of qualified custodians, benefiting from the pricing and liquidity advantages characteristic of ETFs.
VanEck, in its latest analysis, has reevaluated the fundamental investment case for the altcoin focusing on how Ether interacts with Bitcoin [BTC] in a traditional 60/40 portfolio, as well as the tradeoff between risk and return. Per the AUM, Ethereum’s ETF approval positioned the network favorably in the eyes of crypto entrepreneurs, traditional financial market participants, and, Big Tech firms. If the leading altcoin continues its stronghold among smart contract platforms, a credible path to $66 billion in free cash flow to token holders supports a $2.2 trillion asset, or $22,000 per coin, by 2030.
Ethereum: VanEck Sees $4T Settled and $66B in Free Cash Flows
With around 20 million monthly active users, the Ethereum network has settled $4 trillion in value and facilitated $5.5 trillion in stablecoin transfers over the last twelve months. VanEck’s 2030 valuation of ETH is based on a forecast of $66 billion in free cash flows generated and accruing to the ETH token, with an estimated 33x valuation multiple on those cash flows.
The analysis begins by estimating the market size of business sectors that blockchain applications will disrupt, leading to a total addressable market (TAM) of $15 trillion.
We project ETH’s 2030 valuation based upon a forecast of $66B in free cashflows generated by Ethereum and accruing to the ETH token. We estimate 33x valuation multiple on those cashflows. As Ethereum is a platform for applications, we begin our valuation by estimating the market size of business sectors that blockchain applications will disrupt. We estimate the total addressable market (TAM) to be $15T based on annual revenues in these industry verticals
As Ethereum evolves and expands its applications, the model incorporates increased ETH supply burn, greater market capture, and higher take rates on economic activities. These changes reflect the network’s growing fundamentals, recent innovations, and shifting regulatory landscape in the U.S.