Prior crypto cycles rose and declined with the Bitcoin halving cycle, but ETH 2.0 is not discussed as another disruptive supply shock to the crypto market. We find that Ether could be dramatically underpriced.
Let say the current S2F of ETH is 24, according to PlanB's S2FX model, the expected market value is e^12.7598 * 24^4.1167 = 167B, divided by the 116M supply gives the expected price of $1442. So, the current price has over reflected?
Hi Dheepan - how do you explain for the contradiction of views/analysis of S2F on Ethereum when PlanB (whose idea this is - S2F) says that it is not applicable to Ethereum as Eth is not scarce, and S2F oy applies to things that are scarce.
Thanks in advance for your response, really interested in your views on this.
Ethereum during the last crypto cycle (and most of this one) has followed Bitcoin price more than any other factor. The monetary policy was also highly inflationary. So I think PlanB is not wrong when he says Ether (was) not scarce, and thus hard to model with S2F. That changes this year. EIP 1559 and ETH 2.0 likely makes Ether deflationary and so it actually becomes more scarce than Bitcoin.
We have already seen Ether appreciate in price to Bitcoin (the ETH - BTC ratio) earlier than in 2017. To me this is an indication that some portion of the market is pricing in the success of ETH 2.0 and this change to monetary policy. Combined with the number of use cases already on ETH, the scalability of roll-ups and ETH 2.0 (as well as the environmental footprint), I think Ether has more price appreciation potential than Bitcoin. Network effects and first mover advantages do matter, but I think Bitcoin's narrow focus (and lack of technological innovation) makes it inevitable that Ethereum becomes more valuable.
👍 thanks for your response. I see you logic of Eth following BTC so the price prediction using S2F should apply. But it will be interesting to see, and will be a test of where Eth sits with S2F, once the EIP 1559 and ETH 2.0 kicks in and make Eth more scarce than what it is now and more scarce thN BTC as well !!
Let say the current S2F of ETH is 24, according to PlanB's S2FX model, the expected market value is e^12.7598 * 24^4.1167 = 167B, divided by the 116M supply gives the expected price of $1442. So, the current price has over reflected?
Hi Dheepan - how do you explain for the contradiction of views/analysis of S2F on Ethereum when PlanB (whose idea this is - S2F) says that it is not applicable to Ethereum as Eth is not scarce, and S2F oy applies to things that are scarce.
Thanks in advance for your response, really interested in your views on this.
Ethereum during the last crypto cycle (and most of this one) has followed Bitcoin price more than any other factor. The monetary policy was also highly inflationary. So I think PlanB is not wrong when he says Ether (was) not scarce, and thus hard to model with S2F. That changes this year. EIP 1559 and ETH 2.0 likely makes Ether deflationary and so it actually becomes more scarce than Bitcoin.
We have already seen Ether appreciate in price to Bitcoin (the ETH - BTC ratio) earlier than in 2017. To me this is an indication that some portion of the market is pricing in the success of ETH 2.0 and this change to monetary policy. Combined with the number of use cases already on ETH, the scalability of roll-ups and ETH 2.0 (as well as the environmental footprint), I think Ether has more price appreciation potential than Bitcoin. Network effects and first mover advantages do matter, but I think Bitcoin's narrow focus (and lack of technological innovation) makes it inevitable that Ethereum becomes more valuable.
👍 thanks for your response. I see you logic of Eth following BTC so the price prediction using S2F should apply. But it will be interesting to see, and will be a test of where Eth sits with S2F, once the EIP 1559 and ETH 2.0 kicks in and make Eth more scarce than what it is now and more scarce thN BTC as well !!