VanEck forecasts Ethereum to hit $22,000 by 2030, driven by significant growth in digital finance, AI, and blockchain utility.
According to a recent report from the American investment management firm, Ethereum’s role in finance, AI, and marketing positions it for a potential $15 trillion total addressable market (TAM) by 2030.
This projection follows the SEC’s recent approval of Spot ETH ETFs, boosting investor interest. VanEck bases the optimistic forecast on Ethereum’s anticipated $66 billion in free cash flows by 2030, applying a 33x valuation multiple.
In addition to ETF inflows, the next US Non-Farm Payrolls report on June 7 may have an impact on Ethereum’s price movement in June 2024. At press time, ETH’s price is quoted at $3,843, a 0.72% growth in the past 24 hours.
We've raised our 2030 ETH price target to $22K, influenced by ether ETF news, scaling progress, and our read of onchain data. Additionally, we've analyzed how ETH and BTC perform in both traditional and crypto-only portfolios for optimal returns. @Matthew_Sigel @Patrick_Bush_VE…
— VanEck (@vaneck_us) June 5, 2024
Ethereum’s Dominance in the Digital Economy
Ethereum has become a dominant digital economy, with 20 million monthly active users. Over the last year, it settled $4 trillion in transactions and $5.5 trillion in stablecoin transfers. ETH controls roughly $91.2 billion of stablecoins, $6.7 billion of tokenized off-chain assets, and $308 billion in virtual currency.
VanEck’s analysis focuses on Ethereum’s potential to disrupt finance, banking, marketing, infrastructure, and artificial intelligence. The forecasted $15 trillion TAM cuts across various industries. Ethereum’s platform may generate considerable income, with a projected 7.5% penetration in banking, 20% in marketing, 10% in infrastructure, and 5% in AI.
Unique Value Proposition and Revenue Growth
Per VanEck, Ethereum’s unique value proposition as “Digital Oil,” “Programmable Money,” “Yield Bearing Commodity,” and “Internet Reserve Currency” underpins its growth potential.
The blockchain’s revenue has surged, generating $3.4 billion in the past year. This revenue, which accrues to ETH holders, is bolstered by ETH buybacks and burns, permanently removing 0.4% of supply in six months.
Moreover, Ethereum’s user base and revenue growth outpace traditional web2 applications like Etsy and Roblox. The average Ethereum user generates $172 in annual revenue, comparable to Apple Music and Netflix. This economic activity drives demand for ETH, benefiting all holders.
Ethereum’s competitive advantage lies in its lower cost structure. While Apple and Google extract around 30% of app revenue, Ethereum’s take rate is around 24%, expected to drop to 5-10% with Layer-2 adoption. This efficiency could attract more businesses and users to the platform.
VanEck also sees Ethereum playing a crucial role in AI applications, providing the necessary infrastructure for AI agents. By 2030, the AI sector could contribute $1.2 billion in revenue to ETH holders. With finance expected to dominate Ethereum’s revenue, Layer-2 solutions will enhance scalability, driving future growth.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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