Some investors are rightfully pensive about employing a buy-and-hold approach when it comes to cryptocurrencies. Even when it comes to the largest members of the asset class, bitcoin and ethereum.
Crypto is a notoriously volatile space. That can be unnerving for market participants who can’t or simply don’t want to actively monitor positions. Despite the turbulence so frequently associated with digital currencies, the best gains are accrued over long holding periods. And that could prove to be true with ethereum – the second-largest digital currency by market value behind bitcoin.
Ethereum, the platform for the cryptocurrency known as ether, could be in for massive long-term upside and that could highlight opportunity with the Grayscale Ethereum Trust (ETHE). ETHE, which debuted four and a half years ago, follows the CoinDesk Ether Price Index. And it is structured as an index fund.
Ether Excellent Opportunities
As of midday Tuesday, ether traded around $1,564 per token. It also sported a market value of $188 billion, or more than double that of Tether, the third-largest digital currency. Some crypto market observers believe ether could notch a more than fivefold increase over the next few years before embarking upon an even more exponential upside. This would would likely spell good news for ETHE.
In a recent report to clients, Standard Chartered cryptocurrency analyst Geoff Kendrick notes ether could ascend to $8,000 by the end of 2026.
“We think Ethereum’s established dominance in smart contract platforms, along with emerging uses in gaming and tokenization, has the potential to push ETH to the $8,000 level by end-2026,” observed the analyst.
Of note to investors considering ETHE, that forecast is s “a stepping stone to our long-term ‘structural’ valuation estimate of $26,000-$35,000,” added Kendrick.
Also important to market participants is that the digital currency’s projected upside is rooted in fundamentals. This includes the expanding usage cases for what’s known as “layer 2” solutions. Layer 2 solutions are rooted in the ethereum platform and are designed to bolster efficiencies. When those efficiencies are realized, more transactions will stay on the ethereum network, potentially boosting ether’s price in the process.
“Layer 2 scaling solutions … are likely to grow in importance over time. Particularly as architecture upgrades expected in early 2024 sharply lower fees on these platforms. This should help to cement ETH’s dominance in the smart contract space, thereby increasing its P/E ratio (if not its earnings) over the next couple of years,” noted the Standard Chartered analyst.
For more news, information, and analysis, visit the Crypto Channel.