VanEck Research Director Predicted price of 22000 magnesium will significantly decrease if Ethereum continues to be dominated by L2

VanEck Research Director Predicted price of 22000 magnesium will significantly decrease if Ethereum continues to be dominated by L2

VanEck Research Director Predicted price of 22000 magnesium will significantly decrease if Ethereum continues to be dominated by L2

Cryptocurrency asset management company VanEck predicted in a report released in June 2024 that Ether would rise to $22,000 by 2030. When asked about this by the community, Matthew Sigel, Director of Digital Asset Research at VanEck, emphasized that the price prediction of $22,000 is for 2030 and assumes a 50:50 ratio between Ether and L2’s total value locked (TVL), as well as a 50:50 ratio for Miner Extractable Value (MEV) between Ether and L2.

VanEck’s model takes into account the expected growth of the total value locked in Ether, network revenue, and the amount of Ether consumed by the network, such as Ether burned or Ether taken out of circulation due to transaction fees.

However, Matthew Sigel further pointed out that the initial model of the institution assumed a 90:10 distribution of transaction revenue between Ether and Layer 2 (L2), which includes the value extracted by Ether from L2, block fees, validation fees, and other fees. But the actual situation currently favors L2, with a ratio of 10:90 based on the data from the past four months. This is a significant change that indicates L2 is extracting more value from Ether.

In the case of other conditions remaining the same, if this distribution ratio remains at 10:90, the institution’s price target for Ether (ETH) would be reduced by two-thirds, from $22,000 to $7,334.