Ethereum is still undervalued: should you bet on ETH?

Although Ethereum has fallen by 66.4% compared to ATH, many market participants believe that ETH is worth paying attention to

Although Ethereum has fallen by 66.4% compared to ATH, many market participants believe that ETH is worth paying attention to. But what drives this narrative?


  • On chain data shows that ETH was underestimated as of the time of publication.
  • The application of Ethereum in traditional fields may drive demand for Ethereum.

Predicting how much money can be earned by investing in cryptocurrencies is a challenging task. Although some people have achieved success in entrepreneurship, market fluctuations, macroeconomic factors, and sometimes manipulative behavior have led to the bankruptcy of some experts.


Reading Ethereum [ETH] Price Forecast for 2023-2024


For Ethereum [ETH], it has been a long journey since 2014. Those who entered early and held it for a few years must thank their stars for their bets on counterfeit coins. According to CoinMarketCap, ETH's historical performance has grown by a staggering 58014%.

Closer to green than red

But after almost reaching $5000 in 2021, the counterfeit currency returned to below $2000. Now, its historical high (ATH) has fallen by 66.47%. Despite the price decline, many market participants believe that ETH is a cryptocurrency worth paying attention to in the future.


This is because there are several viewpoints attempting to explain the extent to which the value of counterfeit coins is underestimated.

However, being underestimated may be subjective. For some people, you only need to consider historical data. For others, there is a need to focus on significant developments. In terms of Ethereum, it seems to be a combination of all factors.

Therefore, this article aims to evaluate whether ETH can profit from on chain data and its impact on the development of counterfeit coin prices.

Firstly, taking a look at the market value and realized value (MVRV) Z-score seems to be a good indicator. The MVRVZ score compares market value with realized value to evaluate whether assets are overvalued or undervalued relative to their 'fair value'.

Usually, the market value is significantly higher than the realized value, indicating that the market has reached its peak (red area). On the contrary, a significant decrease in market value below realized value usually indicates a market bottom (green area).

According to Glassnode's data, ETH's MVRVZ score is 0.36. This value is very close to the green area and away from the red area. A simple explanation for this state is that ETH was underestimated as of the time of publication.

Source: Glassnode

Does demand push up prices?

Interestingly, this is also the conclusion drawn by Fidelity Investment in its research on August 30th. This financial planning company conducted an in-depth evaluation of the Ethereum blockchain, titled "Ethereum Investment Paper". It also evaluated the connection between blockchain and its token ETH.

Fidelity acknowledges that Ethereum's cost fluctuations are a stumbling block to its adoption and may not replace Bitcoin as a monetary tool. However, the report did not mention that Ethereum's potential as a revenue generating asset should not be questioned, and pointed out that Ethereum's smart contract functionality may help increase its long-term demand.

Fidelity explained that,

By default, mainstream applications used on top of Ethereum will lead to a demand for Ethereum, which is why this long-term trend may become one of the most eye-catching cases of Ethereum as an ambitious alternative currency

The company also uses the ability of Ethereum blockchain to purchase treasury bond, bonds and money market funds as the reason for the possible surge in future ETH demand. As a means of storing value, Fidelity points out that the decrease in ETH issuance makes it a scarce asset and will significantly increase.

In addition, the report also considered the inventory flow ratio and compared it with Bitcoin. The inventory flow ratio compares the current quantity of cryptocurrency with the flow of new quantities extracted within a specific year.

As of July, the stock to traffic ratio of Ethereum was higher than that of Bitcoin. This means that ETH may prove to be a better means of storing value than future king coins.

Source: CoinMetrics

ETH: First hit $2000, followed by a parabolic trend

AMBCrypto interviewed Gracy Chen, the Managing Director of Bitget, regarding ETH's short-term forecast. Chen agrees that in the long run, ETH has a higher value proposition than BTC.

She acknowledges that Bitcoin's current dominant position in the market has weakened ETH, but she also mentioned some positive factors surrounding collateral liquidity and deflation. As for the potential price of ETH in September,

Chen said,

If BTC successfully breaks through $29000, it is expected that the counterfeit currency market activity will surge, and ETH may try to break through the previous resistance level of around $2141

At the same time, Fidelity also considered the connection between Ethereum's destruction mechanism and ETH value. The company takes the Shanghai/Capella upgrade as a reference and points out that unstable ETH supply may become a barrier. Meanwhile, this may also be an advantage.

Source: CoinMetrics


What is the value of 1,10100ETH today?


As a professional, the report points out that the argument surrounding ETH as an ultrasonic currency may heat up, improve demand, and ultimately raise prices. But this requires a consistent supply, just like other assets used as a means of storing value.

In addition to the aforementioned, Fidelity has concluded that Ethereum's role in various protocol upgrade and expansion solutions also gives it the advantage of generating good profits in the future. However, market participants need to pay attention to consistency in this regard.

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