- The fair value of the ether is around $ 1,500 based on measurements of network activity, a JPMorgan strategist said.
- That’s about 55% lower than Friday’s price of around $ 3,470 for the Ethereum token.
- Nikolaos Panigirtzoglou said Ethereum faces increasing competition from smart contracts with other blockchains.
- See more stories on the Insider business page.
The fair value of the ether is around $ 1,500 based on measures of network activity, said a global market strategist from JPMorgan. That’s about 55% lower than Friday’s price of around $ 3,470 for the Ethereum token.
Nikolaos Panigirtzoglou told Insider that the ethereum network is less attractive than the current price of ether suggests, as it faces increasing competition from blockchains like solana and cardano.
Panigirtzoglou, who became JPMorgan’s crypto expert, said he and his team looked at various metrics of activity on the ethereum network to try and determine a fair value for the token.
JPMorgan believes that a larger base of miners and users means greater adoption and makes the network more attractive to product developers.
“We are looking at the hashrate and the number of unique addresses to try to understand the value of Ethereum. We are struggling to exceed $ 1,500,” he said.
“There is a question mark here. The current price expresses an exponential increase in usage and traffic which may not materialize.”
Ether – the cryptocurrency that runs on the ethereum blockchain – has climbed over 850% against the dollar in the past year during a widespread crypto boom.
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Still, Panigirtzoglou recently told Insider that Ethereum’s main selling point – that developers can build decentralized apps and smart contracts on them – “can easily be replicated by other networks.”
“It’s not unique,” he said. “You already see the competition from binance, the competition from solana. And there will be more in the future.” Panigirtzoglou also cited cardano, which recently modernized to enable the creation of smart contracts.
However, Jack O’Holleran, CEO of Ethereum development firm Skale Labs, told Insider that Ethereum is likely to remain the dominant decentralized financial blockchain, especially given the upcoming network changes that should help it achieve. get bigger and faster.
“The vast majority of smart contract developers build in the Ethereum ecosystem,” O’Holleran said. “Despite announcing major partnerships on other channels, we still see the absolute majority of (developers) being drawn into the Ethereum vortex.”
Decentralized finance, or DeFi, uses crypto technology to create financial products that do not require centralized authorities. For example, they could allow trading without clearing houses or “smart contracts” that automatically pay interest on loans.