Bitcoin (BTC) and ether (ETH), the Ethereum cryptocurrency, are assets whose prices are undervalued. This is indicated by a recent report published by Bloomberg Intelligence, which also shows that the appropriate price for these digital currencies would be around double what they currently have: USD 100,000 for BTC and USD 6,000 for ETH.
The study, led by analysts Mike McGlone and Jamie Douglas Coutts and reviewed by various media outlets, takes into account various factors to reach this conclusion. To understand it, you have to understand the difference between price and value. While the first is the price of an asset in the market, the second is the usefulness of a product for its consumers, and what they would be willing to pay for it.
In the case of Bitcoin, one of the crucial points in the increase in value has been the current conflict between Russia and Ukraine, which has unleashed a whole geopolitical movement and has shown the meat of the world economy. According to the CoinMarketCap portal from the Bloomberg report, analysts commented that “the war is increasing the value of Bitcoin as a global digital reserve asset, while Ethereum evolves as Internet collateral.”
Bitcoin has become a direct competition for gold, which, in full conflict, has seen its potential as a store of value diminished. On the other hand, bitcoin, since the beginning of the war, has increased its price by 20%. As reported in CriptoNoticias, Bitcoin has been taking the path as a reserve of value, considering itself the “digital gold”, this after the war began, its price had suffered a slight drop.
For McGlone and Douglas Coutts, the world is in a stage of passage between the old school, which still sees gold as an investment, towards the “upstart” change of the digital store of value that new generations see in bitcoin.
The merger of Ethereum may change the fate of its price
Likewise, in the case of ether, Bloomberg analysts conclude that its current price is undervalued by almost 50%. $6,128 is the exact number that they consider to be a fair price for the Ethereum cryptocurrency.
The reason for this would be the imminent changes that the network co-created by Vitalik Buterin would be experiencing. Recently, speculation has begun about the final date on which the merger will occur (“The Merge”). Even the Ethereum Foundation’s own official website showed that it would arrive in mid-2022. At that stage, both Proof-of-Stake (PoS) and Proof-of-Work (PoW) Ethereum will work in parallel. This, while taking the final step to “turn off” PoW mining.
As rescued by the MarketWatch portal in its review of the Bloomberg report, when this happens, it will increase the demand for Ethereum, and even more institutional funds would come to the network.
Likewise, the report estimates that, if the emission of Ethereum is reduced and if it becomes a deflationary asset —as expected— it is possible that its valuation could increase much more due to the constant increase in its scarcity.
Like the Bloomberg analysts, personalities from the investment world are also bullish on the price of ETH. Among them we can mention Mark Cuban, owner of the NBA team, Dallas Mavericks, who said he was very optimistic (bullish).
Cuban pointed out days ago that, according to his prediction, the price of ETH will increase after the merger. As CriptoNoticias has reported, this businessman has an investment portfolio made up of 60% bitcoin and 30% ether. He has also invested in scaling solutions for Ethereum, such as the Polygon sidechain.