Let’s start with the conclusion: the analysts at InvestingHaven, an online market research service with a strong competence in forecasting markets, concluded that the long term price target of Ethereum is $1000. The researchers believe this target will be achieved before 2020.
This is what they wrote today: “Given our extensive background in forecasting markets, from gold to stocks and currencies, we could not resist the challenge to also forecast the price of Ethereum. After our Ethereum price forecast of $550 for 2017, it was about time to apply the same forecasting method and derive a longer term price target for the price of Ethereum.”
According to the researchers, forecast the price of Ethereum is a serious challenge because there is no useful data available to apply a direct forecasting method. The Ethereum related data are all focused on network and pricing but not on real usage.
Moreover, “chart analysis is also not very useful in deriving an Ethereum price forecast. The long term chart of Ethereum does not reveal any form of pattern apart from a parabolic rise. This pattern, however, has no visible indications which may suggest how long or how high the rally will go on.”
InvestingHaven’s research team developed a method based on classic supply/demand fundamentals. The method looks to collect data points which paint a picture of demand, and, in doing so, gives an indication on the intrinsic value of Ethereum.
1. Supply statistics: Supply of Ether will flatten out over time. In one or two years from now new coins will be equally created against the number of coins that go out of circulation. So for long term forecasting the supply of Ether is not a very important indicator.
2. Ether application demand statistics: Many applications are being launched and developed at this point. Ethereum is playing a major role in applications like predictive analysis, decentralized market places, cross border payment services, digital signature in transactions, digital rights management, crowdfunding, and many more.
According to the researchers, it is hard to calculate the demand and future usage. The finance sector is where Ethereum offers major value. That sector has a huge potential. From that perspective, it is really fair to say that Ethereum’s usage in decentralized blockchain applications will go up 20 to 30 fold over the next 5 to 7 years. That is not an overstatement, but rather an understatement.
3. Ether investment demand: One can buy Ether as an investment only with access through a wallet. That really is not mainstream at this point. In April 2017, Grayscale launched The Ethereum Investment Trust (ETC) which is a private fund in Ethereum. However, it is a private fund, so not very accessible to a wider audience.
Furthermore, there is no Ethereum ETF yet. Such an ETF would open up access to the large group of traditional investors as an ETF needs to hold a minimum of Ether once it launches. The first Bitcoin IRA is a fact, but there is no Ethereum IRA to drive the price of Ethereum higher. Imagine what happens if just 0.01% of retail public starts buying Ether for their IRA.”