Methodology Used to Estimate Ethereum’s Peak Value of $75k to $175k
In the research note, Mr. Peterson goes on to explain that the aforementioned peak value of Ethereum is calculated on the assumption that ETH ‘is a technology that follows a diffusion function represented by a Gompertz curve’.
He goes on to provide the following equation and parameters for the estimated Gompertz Curve for Ethereum.
A Wide ETH Estimate of $75k to $175k is Due to A Large Margin of Error
Mr. Peterson also points out that his methodology has a large margin of error hence the wide range of $75k to $175k within a fifteen to twenty-year period. He explains this fact through the following statement and accompanying chart.
The margin of error is quite large and so the estimated saturation value for Ethereum ranges between $75,000- $175,000 in about 15-20 years (Figure 3 below).
Based on an initial price of $2,000 and a 15-20-year horizon, Ethereum’s average annual rate of return would range between 20% and 35%. It should be noted these are conservative estimates.
Ethereum’s Actual Path is Unpredictable
In the concluding remarks of his research note on Ethereum, Mr. Peterson issues a disclaimer that the actual price of Ethereum in the future might differ due to the unpredictable nature of the markets as explained below.
The figures…are rough estimates intended to illustrate the impact of network growth on value, and to illustrate and estimate the terminal saturation price of Ethereum. This information is not a price forecast and is unsuitable for investment decision-making.
… the actual price path that Ethereum may follow is inherently unpredictable in short term and subject to several practical limitations.
- Ethereum’s maximum price could lie between the range of $75k and $175k
- This peak value could be reached in the next 15 to 20 years
- The analysis of Ethereum’s maximum value and timeframe assumes that ETH is a technology that follows a diffusion function represented by a Gompertz Curve
- As with all models, the price of Ethereum may be affected by unpredictable events in the future
The number two digital asset of Ethereum (ETH) could reach a maximum price within the range of $75,000 and $175,000. This is according to a research note shared by Timothy Peterson of Cane Island Alternative Advisors where he also pointed out that such a peak value could occur in the next 15 to 20 years.