“Digital assets are a nascent asset class. Blockchain technology is fresh,” said Vivek Raman, co-founder of the emerging Ethereum think tank, Etherealize, in a dialogue with The Block. “We must employ this approach of adapting old valuation metrics to entirely new assets. Viewing the underlying blockchain assets as merely tech stocks does not do them justice.”

Raman, one of the 21 co-authors of the research paper, added that comparing ETH to “global reserve assets like oil, the bond market, and M2 money supply” offers a more insightful model to comprehend Ethereum’s “terminal endpoint.” “When adoption takes place, it’s going to be as impactful as the internet, perhaps even more.”

It’s not a novelty that investors speculate on price predictions. Recently, Michael Novogratz of Galaxy opined that 1 BTC could potentially be valued at $1 million. There is an increasing number of investors who perceive Bitcoin as “digital gold”, and following this line of thought, the co-authors proposed that ETH resembles “digital oil.”

They pointed out that Ethereum presently dominates the majority of blockchain activity that has exhibited any semblance of product-market fit, such as stablecoins and tangible assets. Over 80% of tokenized assets have been issued on Ethereum, including those by premier asset managers and infrastructure providers.

“ETH is not just a token — it functions as collateral for the on-chain economy, computational fuel, and yield-generating financial infrastructure. It’s actively stockpiled, staked, burned, and utilized,” they explained. Ethereum secures approximately $767 billion worth of assets.

Furthermore, there are structural elements of the token that make it appealing. Following the EIP-1559 hard fork in 2021, the blockchain incorporated a mechanism that incinerates tokens — setting a cap on the network’s maximum theoretical gross issuance at 1.51% per year. Since September 2022, ETH supply inflation has lingered near 0.092, lower than both fiat currency and BTC, Raman emphasized.

ETH currently trades well below its all-time high of around $4,891, established in 2021. The authors believe the token has “short-term” potential to reach $8,000 and $80,000 as a monetary reserve and commodity asset.

However, not everyone shares the optimism that ETH will one day be considered a reserve asset. Noted commentator and DBA co-founder Jon Charbonneau agreed that ETH is currently “undervalued,” but argued the opposite. Charbonneau has consistently contended that ETH is overpriced and, while an Ethereum bull, does not advise holding the asset.

The authors also noted that while “Bitcoin’s narrative is widely accepted by institutions,” it could be more challenging for investors to grasp Ethereum’s inherent value.

In recent times, Ethereum’s leadership at the Ethereum Foundation and the larger community have sought to reposition the network as a more competitive blockchain. The EF recently promoted two new co-directors, who have strived to communicate the organization’s evolving priorities, and Raman co-created Etherealize with renowned developer Danny Ryan as a platform to engage institutional clients and governments.

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