Ecoinometrics - How to value Ethereum?

Why putting a target price on Ethereum is hard and what we can do about it.

If you have been involved in crypto for a while it is easy to forget that the landscape of digital assets is still very new.

Bitcoin is 13 years old. Ethereum is 7 years old. And almost everything from DeFi to NFTs is at most 5 years old.

So trying to extrapolate where these assets will be in 5 to 10 years is a bit like asking people who used the internet in 1995 how much business value was going to be created by the internet overall. The answer involves a LOT of guesswork.

But let’s give it a try anyway.

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How to value Ethereum?

Out of all the things that have been built so far in crypto the two networks that are in the best position to endure are clearly Bitcoin and Ethereum.

Bitcoin because it is the first one and because it has proven to be extremely reliable at what it does for more than a decade. Ethereum because as far as smart contract platform goes it is the only network that has achieved scale both in terms of amount of users and amount of developers. 

I have written about the subject many times before so I won't expand on that more today. But Bitcoin and Ethereum aren't competing against each other. And even if they were, it would be a mistake to pick one and ignore the other from the perspective of maximizing your returns.