A strategist at JPMorgan stated that ether’s fair value is way lower than its current price. According to a set of measurements based on network activity, he calculated ether’s value at $1,500, 55% lower than its market price. One of the reasons argued for this assessment, is that Ethereum is not so unique anymore, and it is facing tough competition from other chains like Solana and Avalanche.
JPMorgan Strategist Thinks Ether Is Overvalued
Nikolaos Panigirtzoglou, Managing Director of JPMorgan, stated that he thinks ether (ETH), the native asset of the Ethereum network, is grossly overvalued. Panigirtzoglou took several measures of network activity and tried to translate them into a number that represented the fair value of the asset. He and his team estimated ether’s fair value at $1,500, which is currently 55% less than today’s market price.
The JPMorgan strategist thinks the price has rallied as a result of the confidence the market has in the future developments of the project. He stated:
We look at the hashrate and the number of unique addresses to try to understand the value for ethereum. We’re struggling to go above $1,500. There is a question mark here. The current price is expressing an exponential increase in usage and traffic that might not materialize.
Ethereum Killers Galore
Part of this analysis has its base in the idea that Ethereum’s proposal is not so unique anymore. Ethereum pioneered the concept and implementation of smart contracts in the cryptocurrency market. But that feature is now shared by a slew of chains, dubbed “ethereum killers,” that are seeking to take a bite of Ethereum’s market share by offering the same traits. About this, Panigirtzoglou stressed:
It’s not unique. You’re already seeing competition from Binance, competition from Solana. And there are going to be more in the future.
While these Ethereum network alternatives have entered with some force in the market, it might prove difficult to beat Ethereum’s network effects. Even with some heavy venture capital (VC) investment backing them up, most of the innovation is still happening on Ethereum, and it then spreads to other projects. This is the case of decentralized finance (defi) and non-fungible tokens (NFTs), features that first appeared on Ethereum and then were ported to other chains.
This is what Jack O’Holleran, CEO of Skale Labs, told Insider. He stated:
Despite major partnerships being announced on other chains, we still see the absolute majority of developers being pulled into the Ethereum vortex.
What do you think about JPMorgan’s estimated ether fair price? Tell us what you think about this assessment in the comments section below.