VanEck Analysts Raise Ethereum (ETH) Price Target to $22,000

TLDR

• Ethereum ecosystem’s active users have increased ninefold since 2020, with over 2.25 million daily active users in Q1 2024
• VanEck analysts predict ETH could hit $22,000 by 2030, driven by growing demand and scaling solutions
• Ethereum’s user numbers are part of its roadmap, with co-founder Vitalik Buterin focusing on using layer-2 networks to scale the main blockchain
• VanEck analysts anticipate spot Ether ETFs will soon be approved to trade on U.S. stock exchanges, benefiting financial advisors and institutional investors
• Despite lower user numbers, Ethereum still generates three times more in fees than the top layer-2 networks and Solana combined

The Ethereum ecosystem has experienced a remarkable surge in active users over the past four years, with daily active users increasing ninefold since 2020.

According to data compiled by crypto ETF issuer Bitwise, the Ethereum ecosystem, including its layer-1 mainnet and layer-2 scaling solutions such as Arbitrum, Polygon, Optimism, Base, and zkSync, had an average of over 2.25 million daily active users in the first quarter of 2024, compared to just 250,000 in Q1 2020.

This significant growth in user activity has caught the attention of analysts at VanEck, a prominent crypto ETF issuer.

In a recent blog post, VanEck’s head of digital assets research, Matthew Sigel, and his colleagues raised their price target for Ethereum, predicting that the cryptocurrency could reach $22,000 by 2030.

The analysts cited the growing demand for Ethereum and its scaling solutions, as well as the anticipated approval of spot Ether ETFs on U.S. stock exchanges, as key factors driving their bullish outlook.

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

The approval of spot Ether ETFs would allow financial advisors and institutional investors to hold Ethereum in their portfolios, benefiting from the pricing and liquidity advantages of ETFs. VanEck analysts project Ethereum’s 2030 valuation based on a forecast of $66 billion in free cash flows generated by the network and accruing to the ETH token.

While Ethereum’s user numbers have decreased as a percentage of the total ecosystem due to the migration of transactions to layer-2 networks, this development is part of Ethereum’s roadmap.

Co-founder Vitalik Buterin has been focusing on using layer-2 solutions to scale the main blockchain, arguing that they are similar to the sharding concept of the old Eth 2 plan and may help foster growth in various “subcultures” within the Ethereum ecosystem.

Despite the lower user numbers on the Ethereum mainnet, the blockchain still generates three times more in fees than the top layer-2 networks and Solana combined, a testament to its value proposition.