Commodity analysts from Bloomberg say that Ethereum (ETH) is significantly undervalued and that three of its biggest competitors are all showing solid potential.
In the latest Crypto Outlook report, Bloomberg strategist Mike McGlone says that based on a discounted cash flow model, which attempts to estimate the value of an investment based on projections of future cash flows, Ethereum is undervalued by a long shot.
“Traditional investors may discover the rules of the game have changed with Ethereum, which is developing into a crossover asset with a unique blend of equity, commodity and monetary characteristics. One of our discounted cash flow models currently arrives at an Ether value of $6,128, giving it 110% upside from current levels.”
The analysts take note of Ethereum’s massive flow of revenue via its transaction fees, which they say have gone up by over 200% each year since the blockchain’s inception.
The commodity strategists also say that trend signals are bullish for Ethereum competitors Solana (SOL), Terra (LUNA), and Avalanche (AVAX).
Along with the three ETH rivals, the analysts highlight other major layer-1 chains’ noticeable outperformance of major cryptocurrencies during the broad market bounce over the last several weeks.
“Alternative layer-1s such as Solana, Terra and Avalanche have led the broader market recovery, which even after accounting for higher volatility, have posted March monthly returns in the vicinity of 1.5-2x higher than the benchmark asset. This improvement in technical breadth is a healthy sign that risk appetite is returning.”
As for Bitcoin (BTC), the commodity strategists look at the historical performance of crude oil to gauge what the next trend could be.
Viewing both assets as commodities markets, the analysts suggest that crude oil’s relatively high prices compared to Bitcoin’s discount could mean that BTC’s price rises as it reverts back to the mean.
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