Macroeconomics guru and Real Vision co-founder Raoul Pal is predicting that Ethereum will surge to $20,000 this cycle.
In a Marco Insiders article, the former Goldman Sachs executive says that his models, including Metcalfe’s Law which states that the value of a network is directly correlated with its number of users, suggest that a crypto asset’s value is based on adoption.
Looking at Ethereum, Pal highlights that the leading smart contract platform’s market cap is highly correlated with its number of active addresses just like Bitcoin.
Pal says the correlation between adoption and network value is not a coincidence.
He explains that Ethereum’s price distribution versus its number of active addresses mirrors Bitcoin’s exact performance at the same stage. He notes that Ethereum is six years younger than Bitcoin and that market participants will have to wait for the same network effects to kick in.
Pal also looks at a key milestone when BTC and ETH achieved 1 million active addresses. According to the Real Vision CEO, ETH’s growth is virtually identical to Bitcoin, just 4 years apart.
“Please note that the prices are EXACTLY the same too. We didn’t fit for prices, we fitted for 1m active addresses.”
Based on Ethereum’s growth trajectory in terms of price and adoption, he believes the second-largest crypto asset will follow in the footsteps of Bitcoin.
“It is the SAME as Bitcoin, at the SAME point in its adoption cycle, with the exact SAME price and its market cap is rising faster… and suggests that its adoption cycle might be more dramatic too…
ETH will outperform Bitcoin by almost 2x and is driven by the exact same mechanism – a great narrative – the platform for programmable money and, obviously, Metcalfe’s Law.”
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