Ethereum (ETH) Price Analysis: ETH to $22k? Network Activity at Highs, Analysts Bullish

TLDR:

Ethereum price projections range from $4,600 to $22,000 by 2030
Network processed $4 trillion in settlements last year
Daily gas usage hit all-time high of 109 billion on September 1
On-chain stablecoin volume reached record $1.46 trillion
Layer 2 adoption driving scalability and growth

Ethereum, the second-largest cryptocurrency by market capitalization, is experiencing a surge in network activity and adoption. This growth has led some analysts to project significant price increases for ETH in the coming years.

VanEck’s head of digital asset research, Matthew Sigel, estimates that the Ethereum network could generate up to $66 billion in annual free cash flow by 2030.

This projection is based on the network’s increasing role in processing global transactions. Sigel notes that Ethereum handled roughly $4 trillion in settlement value over the past year, in addition to $5 trillion in stablecoin transfers annually.

“This is far bigger than PayPal and is beginning to approach networks like Visa,” Sigel commented during a recent panel discussion.

Based on these projections, Sigel suggests that ETH’s price could potentially reach as high as $22,000 per token by the end of the decade. This represents a substantial increase from its current price of around $2,300.

David Kroger, a data scientist at cryptocurrency brokerage StoneX, offers a more conservative but still bullish estimate. Kroger sees ETH prices climbing to approximately $4,600 over the next 18 months, with potential for further growth to around $12,621.

These price projections are supported by several key metrics indicating strong network activity and adoption. On September 1, Ethereum’s daily gas usage hit an all-time high of 109 billion, despite recent low gas prices. This milestone suggests that demand for Ethereum’s network remains robust.

Ethereum’s on-chain stablecoin volume has reached a record high of $1.46 trillion, more than doubling from $650 billion earlier this year. DAI led the stablecoin market with $960 billion in volume, while USDT and USDC continue to dominate as well.

This increase in stablecoin volume is attributed to growing demand in decentralized finance (DeFi) and increased involvement from traditional finance institutions.

Layer 2 (L2) solutions are also playing a crucial role in Ethereum’s growth. Platforms like Arbitrum, Base, Optimism, and Mantle are driving scalability and adoption, contributing to the network’s long-term potential.

Ethereum has faced some challenges recently. The network experienced a sharp drop in revenue following its March Dencun upgrade, which cut transaction fees by approximately 95%. Sigel acknowledges this setback but remains optimistic about Ethereum’s ability to recover.

“Ethereum still has some levers it can pull to recover value,” Sigel stated. “That’s what we’re looking at for the second half of the year.”

As Ethereum enters the final quarter of 2024, historically a period of increased trading volume and price movements in crypto markets, investors and analysts will be closely watching key metrics such as funding rates.

These rates, which indicate the balance between long and short positions in futures markets, have been hovering at relatively low levels between 0.002 and 0.005. Some analysts suggest that a rise above 0.015 could signal the start of a new price rally.