Fundstrat Analyst: Ethereum Is the Best Risk/Reward & Can Touch $10,500 Backed By DeFi

Fundstrat Analyst: Ethereum Is the Best Risk/Reward & Can Touch $10,500 Backed By DeFi

January 20, 2021

The world’s second-largest cryptocurrency Ethereum (ETH) is current on investors’ radar soon after it hit an all-time high of $1439 on Tuesday, January 19.

Speaking to Bloomberg, Fundstrat Global Advisors’ strategist David Grider said that the ETH price can surge 7x from the current levels all the way up to $10,500 levels. Interestingly, Grider’s prediction is based on the popularity of Ethereum among the decentralized finance (DeFi) applications.

Grider believes that the launch of Ethereum 2.0 marks good progress in improving its network capabilities and the network upgrade will help it process transactions on a massive scale similar to Visa and Mastercard. In a note to clients on Tuesday, Grider wrote:

Ether is “the best risk/reward investment play in crypto. Blockchain computing may be the future of the cloud. Risks include setbacks for the network upgrade or a crypto bear market”.

Although, the development with Ethereum 2.0 has just started with deposit contracts going live in December 2020. The complete implementation of Ethereum 2.0 will still take another 2 years.

However, despite the recent rally, many analysts believe that ETH will continue its upward momentum this year. The Ethereum price rally comes backed by strong fundamentals and on-chain metrics which suggest that we might be just getting started.

Pantera Capital: ETH Institutional Interest Shall Pick-Up Soon

The launch of CME Ether Futures is only three weeks away and the analysts at Pantera Capital believe that it could fuel major institutional interest in the cryptocurrency. In its January investor letter, Pantera Capital writes that as more holder stake their ETH with Ethereum 2.0, it locks up the coins and puts less selling pressure on the ETH price.

In the letter, the analysts say that ETH is undervalued at this point. Read the below excerpt.

“On Ethereum, DeFi has grown from $1bn in Jan 2020 to $16bn in Jan 2021, has more fees paid than Bitcoin, trades at an implied P/E multiple of 79, is down 14% from its all-time high, and we believe is undervalued on a relative basis to Bitcoin.”

Apart from the ETH 2.0 staking, the Pantera analysts also stated: “…once CME ETH futures launch, it legitimizes Ethereum as something institutional investors can own, and it’s actually a fairly easy bucket for them to allocate to (it fits in their tech disruption buckets)”.

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