Ethereum had always had its price be a strong bone of contention among investors. While some may believe that the digital asset is overvalued, others believe that the cryptocurrency is yet to fulfill its potential. One of those is Bloomberg analyst Jamie Coutts, who has revealed a very bullish forecast for the digital asset, saying it would grow more than 100% from its current price.
Ethereum At $6,000?
Coutts has expressed a very positive outlook for the second-largest cryptocurrency, Ethereum. Like others before him, the Bloomberg analyst sees the cryptocurrency’s utility and real-world uses as the argument for this very high valuation. This is why Coutts has said that he sees the price of the digital asset growing to more than $8,300, over a 100% increase from where it is currently trading.
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The Bloomberg analyst referred to the cryptocurrency as a “unique blend of equity, commodity, and monetary characteristics,” a school of thought not at all scarce among investors and supporters of Ethereum.
Using the discounted cash flow model that was created by Bloomberg, it is expected that the value of ETH tokens could rise as high as $6,128, more than doubling in price even after the recent surge.
What Is Driving This?
Besides Ethereum being one of the cryptocurrencies with the most utility, it has also made it onto the radar of big investors due to the upgrades being performed on the network. One of these upgrades is the move to the Ethereum consensus layer that will finally move the network from using the proof of work mechanism to utilizing the proof of stake mechanism already employed by a number of blockchains.
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This upgrade will not only upgrade the network in terms of security but it would help with scalability. By doing this, the network can allow for an even larger volume of transactions to be carried out.
ETH trading above $3,000 | Source: ETHUSD on TradingView.com
It is expected that with the final “Merge” will come more demand for Ethereum. If this is the case, then with the higher demand will come higher network use. This will inadvertently lead to higher fees on transactions, meaning higher returns for network validators. Furthermore, predicted growth like this will see more people lock their ETH to become validators.
Following this trend, Ethereum will likely surge in value as more investors clamor to get their hands on the cryptocurrency. And with the EIP-1559 burn making it a deflationary token, the surge predicted by Bloomberg seems more realistic than it is optimistic.
Featured image from DataDrivenInvestor, chart from TradingView.com