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As Bitcoin (BTC) still struggles to retake the $60,000 price level, Ether (ETH) has been on a rampage this week and even broke through $3,000 for the first time. Seeing the bullish price trend of the world’s second-largest crypto by market cap, a market research firm believes that Ether could reach $10,000 this year.
“Ethereum reached a new all-time high of $2,800 this week,” FundStrat wrote on a research note published Thursday. “We’re maintaining our overweight Ethereum vs. Bitcoin recommendation from April 2020 and reiterating our ~$10.5k price target from January this year.”
The research firm also expects ETH’s market cap to continue to rise even further. “Ethereum’s market cap has risen to ~30% of Bitcoins over recent weeks,” FundStrat added. “During the last market cycle, Ethereum broke this level and head as high as 80% of Bitcoins value – we’re not predicting exactly this but it's a useful frame of reference.”
The firm based its optimistic forecast on the rising activity on the Ethereum blockchain. “One reason we remain bullish on Ethereum is the large amounts of development happening there and the resulting economic activity in its digital economy,” FundStrat said.
“Ethereum and others are enabling new financial applications which have grown significantly in scale over the last year,” the research firm added. “These applications are generating ~3x the fees for the Ethereum network vs. Bitcoin which trades at ~3x the market cap.”
One Sunday, Ether rose above $3,000 for the first time in the crypto’s history. At the time of writing, ETH traded at $3,160 based on Coinmarketcap data.
Total decentralized finance (DeFi) market capitalization has soared above $100 billion recently, according to Coindesk. The publication added that some of the most popular DeFi projects are being built on the Ethereum blockchain, pushing the demand for its native crypto, Ether.
“Our price target of $10.5k from January 2021 looks at Ethereum this way and values it on a revenue multiple basis," FundStrat said. “Although the price has doubled since our target was issued, Ethereum annualized fee revenue growth has nearly doubled as well, while the price to revenue multiple has remained roughly the same.”
The firm also added that even at its current level, ETH is still relatively cheap. “Given the correspondingly strong improvement in fundamentals, we think Ethereum still looks as cheap as it did 3 months ago at half the price.”
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