Standard Chartered Bank: "ETH has ten times the room to rise!" Regulatory issues may become stumbling blocks for further increases

UK banking giant Standard Chartered released a report on cryptocurrency on Tuesday (7), titled "Ethereum Investor Guide", evaluating the future growth potential of ETH, its development advantages, and potential challenges it may face during price increases.

The Future Valuation of ETH

Researchers at Standard Chartered Bank primarily value ETH in two ways. In the first approach, researchers liken BTC to a credit card company and ETH to a banking system. They analogize the market value of global credit card companies to that of global banking systems (the market value of global banking systems is about 4 times that of global credit card companies) to estimate the future value of ETH. Under this valuation method, one ETH is estimated to be around $35,000.

The second approach involves estimating based on the share of the total cryptocurrency market value. Currently, BTC's total market value accounts for about 1/3 of the total cryptocurrency market value. Researchers believe that in the future, ETH's total market value will catch up with BTC. Under this valuation method, one ETH is estimated to be around $26,000.

However, the report also points out:

Valuing ETH at $26,000 to $35,000 may seem too high at present, but the current price also reflects the complexity of ETH compared to BTC and the uncertainty of its future development. In other words, the potential return and risk of ETH are higher than those of BTC. For ETH to reach such a high price, the price of a single BTC would need to reach at least $175,000.

Advantages and Obstacles in the Development of ETH

Although there are technical differences between BTC and ETH, such as block generation time, transactions per second, and total circulation, the report believes that Ethereum's clear "environmental advantages" are what make it promising. In addition to applications like NFTs, DAOs, DeFi, and ICOs, the arrival of ETH 2.0 will transition the current PoW consensus mechanism to a more efficient and environmentally friendly PoS consensus mechanism. eWASM will also replace the existing Ethereum Virtual Machine (EVM), greatly enhancing the functionality and scalability of Ethereum.

From a demand and supply perspective, as more ETH transitions from ETH 1.0 to ETH 2.0, with more ETH staked in smart contracts, and the burning mechanism of EIP-1599 reducing the daily addition of ETH, the decreasing circulating supply in the market increases the possibility of price appreciation. The report also notes that this year, ETH's inflation rate has been steadily decreasing since the beginning of the year.

However, as the variety of applications on Ethereum continues to grow, there has been a significant increase in transaction volume, indirectly leading to rising gas fees. If gas fees remain consistently high, it may reduce users' willingness to use Ethereum, putting upward pressure on ETH prices.

The report also mentions an interesting phenomenon: as the price of ETH continues to rise, the number of searches for ETH on Google and mentions of it on Twitter also increase, further driving up the coin's price.