As Ethereum continues to waver amid a broader downturn in the crypto market, one pundit has ignited a fervent debate with a bold prediction regarding the second-largest crypto asset.

Adam Cochran, a partner at activist venture capital firm CEHV, took to Twitter on Saturday to present a compelling case for the possibility of Ethereum’s price surging to over $450,000 within the next two decades.

Cochran’s argument began by urging individuals to view Ethereum not as a typical company but as an innovative blockchain-based infrastructure surpassing traditional models’ constraints. To counter those who expressed skepticism regarding the feasibility of a 20-fold increase in ETH, he drew comparisons between Ethereum’s market value and that of technology giants such as Apple and Amazon.

At the core of Cochran’s analysis was the immense volume of securities processed, an astonishing $2.5 quadrillion in the previous year alone. The pundit noted that if these securities were handled on the Ethereum blockchain, accompanied by a minimal 0.05% gas fee, it would result in the annual burning of ETH worth $1.25 trillion. He noted that this amount is 5.7 times greater than the current market capitalization. Accordingly, based on that, Cochran envisioned Ethereum’s potential value soaring to an extraordinary $35 trillion.

However, he went even further by introducing the concept of a compound burning rate. According to him, assuming an annual compound burning rate of 2% or higher over the course of 20 years, each ETH token could reach an astonishing value of $457,081.

“If you assumed it took 20 years to get there and we burn at a compounding rate of 2%+ annual, you get to around $457,081 per ETH. Add in the fact its a yielding asset and you’re over $500k,” he tweeted.

Notably, while Cochran acknowledged that achieving 100% adoption of Ethereum for global securities settlement within two decades might be unlikely, he expressed belief in the realistic possibility of settling 10% of global securities within the next ten years.

“Do I think 10% of global securities can be settled on ETH in the next 10 years? Sure…Do I think Ethereum can also have value markets other than current global securities that would uplift that? Sure,” he added.

That said, Despite Cochran’s bold projections, they reveal the boundless possibilities within the realm of Ethereum. The cryptocurrency’s role as a blockchain infrastructure fosters innovation, a trend that is likely to keep the network and, ultimately, price growing.

Meanwhile, regarding recent market movements, Ethereum’s price exhibited lacklustre movements, dropping around 1.17% over the past week. Since May 13, the second largest cryptocurrency has been seesawing between $1,700 and $1,830, a range that needs to be breached for the price to give a definitive direction. At press time, ETH was trading at $1,841, up 0.65% in the past 24 hours, as per CoinMarketCap data.

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Filed under: Bitcoin - @ May 28, 2023 1:05 pm