Report: ETH pricing is severely miscalculated, with a long-term price potential of $740,000 as "digital oil".

Gate News bot message, according to an institutional report released on Thursday titled "ETH bullish case", leading technology experts and commentators in Ethereum stated that the pricing of ETH is severely mispriced. If compared to other commodities like oil, the long-term price of ETH could maintain at 740,000 USD.

"This is a new asset class. Digital assets are new. Blockchain is also new," said Vivek Raman, co-founder of the newly established Ethereum think tank Etherealize, in an interview. "We must adopt this framework and apply old valuation metrics to entirely new assets. Simply viewing underlying blockchain assets as tech stocks is an underestimation of them."

Raman stated that comparing ETH with "global reserve assets such as oil, bond markets, and M2 money supply" can provide a better model for understanding Ethereum's "ultimate goal", "once Ethereum is widely adopted, its scale will be as large as or even larger than the internet."

More and more investors view Bitcoin as "digital gold," while the co-authors of this article argue that ETH is akin to "digital oil."

The author points out that Ethereum currently dominates the blockchain activities that have achieved product-market fit, such as stablecoins and real-world assets (RWA). Over 80% of tokenized assets have been issued on Ethereum, including assets issued by leading asset management firms and infrastructure providers.

They wrote: "ETH is not just a token - it is also collateral for on-chain economy, computational fuel, and a financial infrastructure for generating yields. It is actively stored, staked, burned, and utilized." Ethereum secures assets worth approximately $767 billion.

In addition, the structural features of the token make it quite attractive. After the EIP-1559 hard fork in 2021, the blockchain implemented a token burn mechanism, limiting the theoretical maximum total supply of the network to 1.51% per year. Raman pointed out that since September 2022, the supply inflation rate of ETH has been hovering around 0.092, lower than that of fiat currencies and BTC.

Despite this, not everyone believes that ETH will one day be seen as a reserve asset. Notable commentator and DBA co-founder Jon Charbonneau also believes that ETH is currently "mispriced," but the direction is exactly the opposite. Charbonneau has pointed out multiple times that the ETH price is too high, and while he is bullish on Ethereum, he does not recommend holding the asset.

The author also pointed out that although "the narrative of Bitcoin has been accepted by institutions," investors may find it harder to understand the intrinsic value of Ethereum.

Source: The Block