by Introduction
In the ever-evolving world of cryptocurrency, analysts are constantly assessing the market for potential investment opportunities. Recently, Geoff Kendrick, the global head of digital assets research at Standard Chartered, shared insights regarding Ether (ETH) and ETH treasury companies. According to Kendrick, both appear undervalued at current levels, presenting an enticing entry point for investors. This article explores Kendrick’s analysis of the ETH market, treasury companies, and the potential for future growth.
ETH Treasury Companies: A Growing Influence
Since the beginning of June, ETH treasury companies have acquired approximately 2.6% of all Ether in circulation. When combined with the significant inflows from exchange-traded funds (ETFs) during this period, a total of 4.9% of all ETH has been purchased. This surge in demand highlights the increasing influence of treasury companies in the cryptocurrency market.
On Sunday, September 24, Ether reached a new all-time high of $4,955, reflecting the mounting interest from treasury companies and institutional investors. Kendrick emphasizes that this trend is only just beginning, with treasury companies potentially aiming to own up to 10% of all ETH in circulation. Such a milestone could significantly impact the market and further drive up the value of Ether.
Forecasting Ether’s Future: A Bold Prediction
Despite the recent downturn in ETH prices, which saw the cryptocurrency dip below $4,500, Kendrick remains optimistic. He maintains his previous forecast that Ether could reach $7,500 by the end of the year. This prediction is based on the belief that the recent sell-off has created a favorable buying opportunity for investors. Ethereal enthusiasts and traders should consider this analysis closely, as it may provide insights into future price movements.
Valuation of ETH Treasury Companies
Kendrick’s analysis extends beyond just Ether itself; he also delves into the valuations of ETH treasury companies. The multiples of market-adjusted net asset value (mNAV), which compares the value of a company’s crypto holdings to its stock market capitalization, have recently declined for several ETH treasury companies. Companies like Sharplink Gaming and Bitmine Immersion show mNAV multiples lower than that of Michael Saylor’s Strategy (MSTR), which does not enjoy any staking yield.
Given that ETH treasury companies can capture a staking yield of approximately 3%, Kendrick argues that their mNAV multiples should not be lower than those of MSTR. This discrepancy suggests that the current valuations of ETH treasury companies may not fully reflect their potential growth, especially as they continue to accumulate Ether.
Market Dynamics: ETF Inflows Amidst Sell-Off
Even during the recent downturn, investor interest in Ethereum ETFs remained robust. On a particularly tumultuous Monday, when Ether’s price dropped by 8%—a decline that was roughly four times greater than Bitcoin’s (BTC) decrease—ETFs still recorded impressive inflows. The funds collectively saw about $444 million in inflows, with BlackRock’s iShares Ethereum Trust (ETHA) leading the charge with $315 million.
This strong performance follows a previous influx of $338 million for the group when Ether was soaring after positive remarks from Federal Reserve Chair Jerome Powell at the Jackson Hole conference. The resilience of ETF inflows in the face of market volatility illustrates the confidence that institutional investors have in Ethereum’s long-term potential.
The SBET Announcement: A Safety Net for Investors
Adding to the positive sentiment surrounding ETH treasury companies is the recent announcement from SBET that it will repurchase stock if the NAV multiple falls below 1.0. This initiative creates a hard floor for the multiples associated with ETH treasury companies, offering a layer of security for investors. Such moves can instill confidence and attract more investment, ultimately benefiting the broader ETH ecosystem.
Conclusion: A Bright Future for Ether and ETH Treasury Companies
As the cryptocurrency market continues to evolve, the insights provided by Geoff Kendrick at Standard Chartered underscore the potential for Ether and ETH treasury companies. With significant acquisition activities, strong ETF inflows, and a positive long-term outlook, both Ether and treasury companies appear poised for future growth. Investors looking for opportunities in the cryptocurrency space should closely monitor these developments and consider the potential of ETH as part of their portfolio strategies.
For those interested in diving deeper into the world of cryptocurrencies, be sure to explore resources on how to buy Ethereum, and stay updated on the latest market trends.
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