Ether (ETH), the native token of the Ethereum network, is undervalued by 9 out of 12 commonly used valuation models, according to market analyst Ki Young Ju, CEO of crypto market analysis platform CryptoQuant.
At a composite “fair value” using all 12 valuation models, the price of ETH would be approximately $4,836, an increase of over 58% compared to the price at the time of writing.
The reliability of each evaluation model is rated on a 3-point scale, with 3 being the most reliable. Eight of the 12 models have a reliability rating of at least 2. “These models were built by trusted experts from academia and traditional finance,” Ju said.
12 different ETH valuation models show that ETH is undervalued by just over $3,000 at its current market price. sauce: ETHval
According to ETHval, App Capital's valuation model, which takes into account total on-chain assets including stablecoins, ERC-20 tokens, non-fungible tokens (NFTs), real-world tokenized assets (RWAs), and bridge assets, puts the fair value of ETH at $4,918.
Using Metcalfe's Law, which states that the value of a network increases proportionally to the square of its actual active users or the number of nodes in the network, the model predicts an ETH price of $9,484, which means the asset is undervalued by more than 211%.
Valuing ETH through a Layer 2 (L2) framework that takes into account Total Value Lock (TVL) in Ethereum’s Layer 2 Scaling Network Ecosystem, the price per ETH is predicted to be $4,633. This means ETH is undervalued by about 52%.
Total fair value of ETH over 1 year. sauce: ETHval
The Ethereum community and analysts continue to debate how to properly value the world's first smart contract platform, with many stating that traditional valuation models are not sufficient to value nascent digital assets and decentralized blockchain networks.
Related: Ethereum ICO whale cashes out $60 million with 9,500x profit as top 1% continues to buy ETH
Despite a mostly rosy outlook, ETH is significantly overvalued according to one valuation model
The Yield Yield Valuation Model values ETH by dividing the annual revenue generated by the network by the ETH staking yield, and states that ETH with a current price of over $3,000 is overvalued by more than 57%.
According to the Earnings Yield Valuation Model, ETH is overvalued. sauce: ETHval
Earnings Yield is the most reliable valuation model to accurately determine the price of ETH, according to ETHval's standards and methodology.
According to this model, the price of ETH should be around $1,296, highlighting the Ethereum network's declining revenues as fees hit record lows and competing networks absorb some of the market share.
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