Crypto analyst who nailed ethereum’s climb to $3,400 says $10,000 is next
Back in January, when the world’s second-largest cryptocurrency by market cap, ethereum, was trading at just over $1,200, one investor made the bold call of predicting a spike to the mid-$3,000 level, claiming it was being “overlooked” by investors.
Just under five months later, that prediction has already hit with ethereum (ETH-USD) up roughly 400% on the year to cross the $3,500 mark as of Friday afternoon. Now, that same investor, Megan Kaspar, co-founder of the digital asset investment company Magnetic, is upping her price target to the $8,000 to $10,000 price range by year’s end.
Kaspar explained her thesis Friday on Yahoo Finance Live, citing new updates coming to the cryptocurrency’s network later this year. The network is planning a shift away from the same method used by bitcoin (BTC-USD) to confirm transactions to one that is far less energy intensive. Unlike bitcoin’s so-called proof of work, which rewards miners who are competing against each other to use computers and energy to record and confirm transactions on its blockchain, ethereum plans to adopt the more efficient proof of stake model, which chooses a block validator at random based on how much ether it controls.
“The shift to proof of stake for block validation reduces carbon emissions by 99.9%, making ethereum a green technology,” Kaspar explained. “So these two updates on the network alone could push ethereum to a trillion dollar market cap which is where bitcoin is at today — that would make ethereum around $8,000 to $10,000 a coin.”
Ether has outperformed bitcoin year-to-date. The former is up nearly 380%, while bitcoin is up about 90% over the same time period.
As high as Kaspar’s price target sounds, which implies about 300% upside from current levels, it matches the $10,500 price target that came from Fundstrat Global Advisors earlier this year. Analysts there calculated their price target from rising activity on the ethereum network as more and more decentralized applications continue to be built on it. Decentralized finance applications, which allow users to earn yield on their crypto assets similar to the way they would at a traditional bank, have seen usage on the network explode from $10 billion in September 2020 to more than $65 billion as of April.
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After the network changes are implemented, Kaspar also believes a greener ethereum will begin to attract more institutional attention relative to bitcoin. Miners in China account for well over half of all the mining power on the network and investors like Kevin O’Leary of “Shark Tank” have increasingly taken issue with that connection. Kaspar says as more investors take note in the years to come, institutional dollars could propel ethereum to $100,000.
“Institutions are mandating that they invest in clean green technologies and that’s what ethereum is becoming,” she said. “Unfortunately, bitcoin’s proof of work network will not be that unless they choose to shift as well.”
Nonetheless, Kaspar still sees upside for bitcoin, predicting the world’s largest cryptocurrency could hit $200,000 by the end of the year. On Friday, bitcoin was trading at over $57,700 a coin. Pantera Capital CEO Dan Morehead expressed a similar level of confidence for bitcoin’s upside with his $115,000 price target by August, citing his model that tracks bitcoin like a commodity.
As he explained to Yahoo Finance earlier this week, “stock-to-flow” models measure existing supplies, usually of commodities, against the flow at which new inventory is produced. In the case of bitcoin mining, that flow in the form of mining rewards is cut in half roughly every four years. When applying the measure to bitcoin over the last year, Morehead has shown bitcoin’s price has moved in lockstep with projections.
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“When people say, ‘Oh this is crazy,’ I push back. I don’t think this is crazy. I’ve been doing this for 10 years, it’s actually very predictable,” he said.
Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering entrepreneurship, crypto, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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VanEck Files for an Ethereum Exchange-Traded Fund
Exchange-traded fund (ETF) startup VanEck has filed for an ether-based ETF, public records show.
The company, which currently has a proposed bitcoin ETF under review by the Securities and Exchange Commission (SEC) proposed an ether ETF on Friday that would allow retail and institutional traders to gain exposure to the world’s second-largest cryptocurrency by market cap without requiring them to directly invest in it.
VanEck intends to work with Cboe BZX Exchange on the offering. The same exchange is providing support for VanEck’s proposed bitcoin ETF. The SEC has postponed any decision on VanEck’s bitcoin ETF proposal to next month. In the past, the SEC has taken as much time as it legally can, about 240 days, to evaluate ETF proposals.
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The federal securities regulator has yet to approve an ETF in the U.S.
VanEck files with the SEC for an Ethereum ETF as it waits for the regulator to approve its bitcoin fund
Ether is the cryptocurrency of the Ethereum network. Photothek/Getty Images
Asset manager VanEck has filed to list an Ethereum exchange-traded fund.
The firm is seeking SEC’s permission to list shares of its VanEck Ethereum Trust.
The SEC delayed a decision on whether to greenlight VanEck’s bitcoin ETF until July.
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Asset manager VanEck is seeking US regulatory approval to launch an Ethereum exchange-traded fund, with the move taking place as the company waits for word on whether it will be able to introduce trading of the first bitcoin ETF in the US.
The VanEck Ethereum Trust would list shares on the Cboe BZX Exchange, according to an S-1 filing with the Securities and Exchange Commission on Friday.
The firm said the trust, in aiming to reach its investment objective, will hold ether, the currency native to the Ethereum blockchain network, and value its shares daily based on the reported MVIS CryptoCompare Ethereum Benchmark Rate. Ether is the world’s second-largest cryptocurrency by market capitalization, behind bitcoin.
VanEck and the Cboe are waiting for the SEC to render a decision on whether it can list a bitcoin ETF, which the asset manager applied for in March. The regulator last week delayed a decision until at least July 17, leaving investors waiting on the US to greenlight the country’s first bitcoin ETF.
Wall Street institutions are increasingly embracing or signaling openness to including cryptocurrency into their operations. This week, S&P Dow Jones index announced the launch of three indices tracking the performance of the bitcoin and ethereum - the S&P Bitcoin Index, S&P Ethereum Index, and the S&P Cryptocurrency MegaCap Index.