VanEck recently raised its price prediction for Ether, estimating that the price of ETH will reach $22,000 by 2030 in a bullish market scenario. Interestingly, VanEck also compared the user revenue of Ethereum with major Web2 companies, showing that Ethereum’s average user revenue has surpassed Apple Music and Netflix.
VanEck, a major US asset management giant and one of the issuers of Ethereum spot ETFs, launched its self-custody NFT market and digital asset platform SegMint on Ethereum at the end of February this year. On the 6th, BSCN Headlines reported that VanEck had pledged 32,400 ETH, worth $125 million. This has led to speculation in the market about whether VanEck is operating nodes independently or has chosen a third-party liquidity staking service. Regardless of the method chosen, it demonstrates the high level of attention this Wall Street financial giant is giving to the Ethereum ecosystem.
At the same time, the institution released a report recently, raising its price prediction for Ether and exploring the optimal investment portfolio allocation between Bitcoin and Ether.
VanEck predicts the price of ETH in 2030
VanEck expects that an Ethereum spot ETF will soon be approved for trading on US stock exchanges, allowing financial advisors and institutional investors to hold Ether under the custody of qualified custodians, while benefiting from the pricing and liquidity advantages provided by the ETF. It is expected that Ethereum and its ecosystem will grow significantly. Therefore, VanEck has updated its financial model and reevaluated the target price of Ether.
According to VanEck’s prediction, 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 media, and gaming: $1.1 trillion
Infrastructure: $1.8 trillion
Artificial intelligence: $1.4 trillion
It is worth noting that the target price of $22,000 represents Ethereum’s ability to capture a 70% market share in the smart contract market. VanEck further predicts:
Smart contract market share 90%: Estimated ETH price in 2030 will reach $154,000.
Smart contract market share 15%: Estimated ETH price in 2030 will be only $360.
Interestingly, VanEck also compared the revenue of Ethereum with Web2 applications:
Ethereum’s revenue of $3.4 billion exceeds the annual revenue of Etsy, Twitch, and Roblox.
Ethereum has 20 million monthly active users, surpassing Instacart, Robinhood, and Vrbo.
Each active monthly user of Ethereum can generate an average revenue of $172 per year, which is significantly higher compared to the user revenue of Apple Music ($100), Netflix ($142), and Instagram ($25).
VanEck believes that Ethereum can be compared to platform businesses like the Apple App Store or Google Play, providing unique value propositions that Web2 platforms do not have.
In addition, VanEck conducted a portfolio study to assess the impact of including Bitcoin and Ether (up to 6%) in a traditional 60/40 stock-bond portfolio.
The study results show that a portfolio including 3% Bitcoin and 3% Ether (along with 57% S&P 500 index and 37% US bonds) can achieve the highest return per unit of risk (measured by standard deviation). That is, with a conservative allocation of 6% to the overall portfolio, the maximum allowable allocation to cryptocurrencies achieves the highest risk-adjusted return.
In terms of maximum drawdown and Sharpe ratio analysis, a portfolio with a 6% cryptocurrency allocation has a Sharpe ratio nearly twice that of a 60/40 portfolio, with only a slight increase in drawdown. This emphasizes the favorable risk-return ratio of adding BTC and ETH to traditional investment portfolios.
For the allocation of a pure crypto portfolio, VanEck’s analysis shows that the ideal allocation is 71.4% Bitcoin and 28.6% Ether, which produces the highest Sharpe ratio, providing the best 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.