What is the fair value of Ethereum?
Simon Seojoon Kim, CEO of the crypto asset management firm Hashed, has developed a comprehensive valuation tool for Ethereum. The model, called ETHval, is designed to provide investors with a broader perspective by calculating the “fair value” of Ethereum using 12 different methodologies.
According to the model, Ethereum’s current price is $2,291.5, while the “aggregate fair value” calculated from a combination of the 12 models is $4,222. This suggests that the asset may be approximately 84% “undervalued.”
ETHval combines 12 different valuation approaches grouped into four main categories. Traditional financial models evaluate discounted cash flow from staking (DCF), price-to-sales (P/S) ratio, fee revenue, and validator economics; the on-chain asset value category includes the TVL multiple and adoption capital. Network effects use metrics such as Metcalfe’s law, the ETH monetary model, and ecosystem consensus volume; while supply scarcity is assessed through indicators such as staking scarcity and liquidity premium.
Analyzing the model’s details, metrics such as Metcalfe’s law ($4,972), staking-based discounted cash flow ($6,873), and validator economics ($5,476) indicate significant upside potential for Ethereum.
On the other hand, some traditional multiplier-based indicators paint a more cautious picture. The price-to-sales (P/S) ratio and fee revenue models, at $16 and $25 respectively, suggest that Ethereum may be “overvalued” according to these metrics.
See also: "Will the Bearish Signal Lead to a 10% Drop in Bitcoin Price?"
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