Ethereum Price Predicted To Reach $11,800 By 2030: VanEck Report

The report predicts that ETH network revenues will increase from an annual rate of $2.6 billion to $51 billion in 2030. Assuming that ETH takes a 70% market share among smart contract protocols, this implies a token price of $11.8k in 2030, discounted to $5.3k today at a 12% cost of capital derived from ETH’s recent beta.

The report offers a clear valuation methodology for Ethereum, considering transaction fees, MEV, and “Security as a Service.” It assesses market capture across key sectors and explores Ethereum’s potential as a store-of-value asset in the evolving crypto landscape. The report values Ethereum by estimating cash flows for the year that ended on 4/30/2030. They project Ethereum revenues, deduct a global tax rate and a validator revenue cut, and arrive at a cash flow figure.

Assuming a long-term estimated cash flow yield of 7% minus the long-term crypto growth rate of 4%, the report arrives at the fully diluted valuation (“FDV”) in 2030. They then divide the total by the expected number of tokens in circulation and discount the result by 12% to 4/20/2023. In the Base Case, the report assumes that Ethereum will achieve $51B in annual revenue in the year ending 4/30/2030.

Source: VanEck Research as of 4/30/2023

They deduct a validator fee from this total, 1%, and a global tax rate of 15%, and arrive at cash flows of $42.90B to Ethereum. Assuming an FCF multiple of 33x, 120.7M tokens, the report shows a Base Case 2030 Price Target of $11,848 per token. The report discounts Ethereum at 12% to determine a valuation in today’s dollars, despite finding, through CAPM, an 8.74%. They use this elevated figure to reflect increased uncertainty around the future of Ethereum. Therefore, the report finds the discounted price of $5,359.71 in the Base Case.

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