VanEck recently raised its price prediction for Ethereum in its report, estimating that the price of ETH will reach $22,000 by 2030 in a bullish market scenario. Interestingly, VanEck also compared Ethereum’s user income with major Web2 companies, showing that Ethereum’s average user income has exceeded that of Apple Music and Netflix.
VanEck, a US asset management giant and one of the issuers of Ethereum spot ETF, launched its self-custody NFT market and digital asset platform SegMint on Ethereum at the end of February this year. Yesterday, BSCN Headlines reported that VanEck had staked 32,400 ETH, worth $125 million.
This has sparked speculation in the market about whether VanEck is operating nodes independently or choosing third-party liquidity staking services. Regardless of the method, it demonstrates the high importance that this Wall Street financial giant places on the Ethereum ecosystem.
At the same time, the institution has released a report recently, raising its price prediction for Ethereum and exploring the optimal investment portfolio allocation between Bitcoin and Ethereum.
VanEck predicts ETH price in 2030
VanEck expects that the Ethereum spot ETF will soon be approved for trading on US exchanges, allowing financial advisors and institutional investors to hold ETH under the custody of qualified custodians while enjoying the pricing and liquidity advantages provided by ETFs. The growth of Ethereum and its ecosystem is expected to be significant. Therefore, VanEck updated its financial model and reassessed the target price of ETH.
According to VanEck’s forecast, by 2030, Ethereum will generate approximately $66 billion in free cash flow and have a total potential market size of $15 trillion in the following key areas:
– Financial, banking, and payments: $10.9 trillion
– Marketing, advertising, social, and gaming: $1.1 trillion
– Infrastructure: $1.8 trillion
– Artificial intelligence: $1.4 trillion
The target price of $22,000 represents Ethereum’s ability to capture 70% market share in the smart contract market. VanEck further predicts:
– 90% smart contract market share: ETH price estimated to reach $154,000 in 2030
– 15% smart contract market share: ETH price estimated to be only $360 in 2030
Interestingly, VanEck also compared Ethereum’s income with Web2 applications:
– Ethereum’s $3.4 billion income exceeds the annual income of Etsy, Twitch, and Roblox.
– Ethereum has 20 million monthly active users, surpassing Instacart, Robinhood, and Vrbo.
– Each monthly active user of Ethereum can generate an average income of $172 per year, which is significantly higher compared to users’ income from Apple Music ($100), Netflix ($142), and Instagram ($25).
VanEck believes that Ethereum can be likened to platforms like the Apple App Store or Google Play, providing unique value propositions to users and app owners that Web2 platforms do not have.
Ethereum’s user income exceeds that of most Web2 companies
In addition, VanEck conducted portfolio research to evaluate the impact of including Bitcoin and Ethereum (up to 6%) in a traditional 60/40 stock-bond portfolio.
The research results show that a portfolio including 3% Bitcoin and 3% Ethereum (along with 57% S&P 500 Index and 37% US bonds) can achieve the highest return per unit of risk (measured by standard deviation). In other words, with a conservative allocation of 6% of the total portfolio, the maximum allowable allocation for cryptocurrencies achieves the highest risk-adjusted return.
In terms of maximum drawdown and Sharpe ratio analysis, the 6% cryptocurrency allocation portfolio has a Sharpe ratio almost twice that of the 60/40 portfolio, with only a slight increase in drawdown. This emphasizes the significant benefits of adding BTC and ETH to traditional investment portfolios in terms of risk-return ratio.
Analysis of “maximum drawdown and Sharpe ratio” for 60/40 stock-bond portfolios including BTC/ETH
For portfolios consisting solely of cryptocurrencies, VanEck’s analysis shows that the ideal allocation is 71.4% Bitcoin and 28.6% Ethereum, which produces the highest Sharpe ratio, providing the optimal risk-adjusted return. A simple 50% BTC and 50% ETH allocation also demonstrates significant advantages, emphasizing the need for investors to hold both cryptocurrencies to maximize profits.
Comparison indicators for various BTC-ETH portfolio allocations