While Bitcoin still takes the number one spot in terms of market capitalisation, Ethereum is still a force to be reckoned with. Some even believe that Ether (ETH) — the native token of the Ethereum network — to be more superior than Bitcoin.
Ethereum’s primary advantage over Bitcoin is that it allows individuals and companies to do more than just transfer money between entities, all thanks to the decentralized applications (dapps) running on its network. ETH can be used as a digital currency on exchanges much like other cryptocurrencies, as well as on the Ethereum network to run applications. Surely these are good enough signs that ETH is a ridiculously valuable asset, right?
It would appear that this JPMorgan strategist thinks otherwise.
JPMorgan’s managing director Nikolaos Panigirtzoglou stated that he sees ETH to be grossly overvalued. ETH’s fair value is estimated to be at $1,500 by Panigirtzoglou and his team, which is 55% lower than its current market price. He and his team calculated the fair value of the asset by taking several measures of network activity into account.
The strategist believes that the market confidence in the project’s future development must have rallied the price of ETH.
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.
Nikolaos Panigirtzoglou, Managing Director of JPMorgan
Panigirtzoglou also believes that Ethereum is no longer monopolizing the crypto market with its ability to implement smart contracts. This once-unique feature is now available in other chains — dubbed “Ethereum killers” — as well.
However, Ethereum still proves to be the best of its kind. Although the more successful Ethereum-like chains are backed by heavy venture capital investors, the majority of the innovative projects are still flocking to Ethereum. Decentralized finance (DeFi) and non-fungible tokens (NFTs) first appeared on Ethereum before being ported to other chains.