Global investment firm VanEck has recently published a report which predicts that the price of ETH could rise to $11,800 by 2030, given that Ethereum achieves $51 billion in annual revenue by the said year. Authored by digital assets research head Matthew Sigel and senior investment analyst Patrick Bush, the report takes into account Ethereum’s transaction fees, MEV, and “Security as a Service” to arrive at this conclusion.
VanEck’s analysts base their prediction on the assumption that Ethereum will hold a 70% market share among smart contract protocols. They identify key categories in which they expect the platform to have significant presence, such as finance, banking, and payments, metaverse, social and gaming, and infrastructure. According to Sigel and Bush, these industries could see as much as 5%, 20%, and 10% of their respective activities shift to an on-chain environment in the future.
Another important aspect of Ethereum’s revenue generation lies in the gas costs paid by users to interact with on-chain businesses’ smart contracts. The report acknowledges ETH system transaction fees and Maximum Extractable Value (MEV) as important sources of revenue for Ethereum.
Additionally, the authors explore the potential of ETH as a store of value in the crypto market. They point out that with Ethereum’s move to proof-of-stake, it could even rival US T-bills in terms of value as a safe haven. Introducing a novel revenue item called “Security as a Service” (SaaS), the report indicates that ETH’s value can be utilized both within Ethereum’s ecosystem and outside it to secure applications, protocols, and ecosystems.
The analysts argue that in a base case scenario, Ether could achieve an annual revenue of $51 billion by the end of April 2030. By accounting for a 1% validator fee and a 15% global tax rate, they arrive at a $42.90 billion cash flow for the same period. With these assumptions, they calculate a “Base Case 2030 Price Target of $11,848 per token.”
To account for uncertainties around Ethereum’s future, the authors discount the valuation at 12%, higher than the 8.74% arrived through CAPM. As a result, they establish a current discounted price of $5,359.71 in this base case scenario.
This analysis sheds light on the potential growth of Ethereum and the impact of transaction fees, MEV, and the novel SaaS concept on its revenue generation and price. However, as with any future predictions, plenty of uncertainties exist, and caution is advised when considering such projections.