Token Terminal, a blockchain analytics platform, predicts that ethereum (eth), the world’s second most valuable cryptocurrency, may rise above $36,800 by the end of the decade based on total addressable market projects.
In deep crypto-research/ethereum-investment-framework#13-addressable-market-analysis” target=”_blank” rel=”noopener nofollow”>analysis Covering ethereum on November 23, the analytics platform laid out several reasons that will take the coin to astronomical levels, almost 18 times higher than spot levels.
ethereum is king and projected to process $14 trillion in value by 2030
The Token Terminal report cited strengthening network effects, increasing token scarcity, and the successful transition to proof-of-stake (PoS) consensus as possible price drivers that accelerated the rally towards $36,800. First-mover advantage and network effects, among others, have given ethereum a competitive advantage over rival smart contract platforms including Solana (SOL) and Cardano (ADA).
Users can deploy decentralized finance (DeFi) solutions on these competing networks, mint non-fungible tokens (NFTs), and engage excessively in web development3. Still, Token Terminal notes that despite ethereum‘s limited scalability and fluctuating gas fees, which tend to increase in trending markets and intense network activity, which discourages commitment, it may dominate in the coming years.
Quantifying future adoption, Token Terminal estimates that by 2030, about half of the financial industry’s trillion-dollar revenue will likely flow through ethereum. To put a number on this, the blockchain analytics platform estimates that over $14 trillion in value will be settled on-chain, with ethereum as the preferred network.
The financial industry generates more than $28 trillion in annual revenue, growing at a compound annual growth rate (CAGR) of 7.5%.
As things stand, this mega valuation expected to flow through ethereum is more than 10 times the entire crypto market as of writing in November 2023. According to CoinMarketCapIt’s a little over $1.4 trillion and bitcoin makes up about 51%.
Projecting from this perspective, the blockchain analytics platform noted that expected adoption across emerging verticals, including identity, content streaming, and even the Internet of Things, could see eth skyrocket year-over-year in the future. next seven years.
Possible challenges that could slow adoption
Still, the study notes that challenges ahead could slow adoption, which could stifle growth and prices. First on the list is the risk associated with regulation. As cryptocurrencies find adoption, research notes that governments could try to interfere to maintain order.
At the same time, there could be unforeseen changes in network design trade-offs, the success and subsequent dominance of Layer 2 will force VCs to prioritize funding off-chain projects and take into account those that are implemented on the main network.
Furthermore, Token Terminal said that even the discovery of an error in the chain, which leads to losses and therefore a decrease in trust, cannot be ruled out in the long term.
Featured image from Canva, TradingView chart