Fundstrat chief intelligence officer (CIO) Tom Lee believes that crypto’s leading smart contract platform will reach a bottom soon.
In a new interview with CNBC, Lee lays out the case he sees for Ethereum (ETH) bottoming out on value in the coming week.
“Well, Ethereum kind of has several ways that establishes a floor. One is that the value of all the assets locked onto the blockchain. Um, and that number is growing, but historically Ethereum bottoms when that ratio is about 50%. So we’re, I’d say, we’re pretty close to that level. That’s why I think Ethereum probably is bottoming this week.”
However, according to Lee, there is one important aspect of ETH’s price action over the last several years that many traders are undervaluing.
Fundstrat chief intelligence officer (CIO) Tom Lee believes that crypto’s leading smart contract platform will reach a bottom soon.
In a new interview with CNBC, Lee lays out the case he sees for Ethereum (ETH) bottoming out on value in the coming week.
“Well, Ethereum kind of has several ways that establishes a floor. One is that the value of all the assets locked onto the blockchain. Um, and that number is growing, but historically Ethereum bottoms when that ratio is about 50%. So we’re, I’d say, we’re pretty close to that level. That’s why I think Ethereum probably is bottoming this week.”
However, according to Lee, there is one important aspect of ETH’s price action over the last several years that many traders are undervaluing.
[cont] “But the other way to look at Ethereum is really its price ratio or even its network value ratio to Bitcoin. It currently sits at — this number is 0.032. The long-term average, like the 8-year average, if we were just to trade to that 8-year average, would put Ethereum at around $12,000.
So I think Ethereum is undervalued because number one, the story is gaining relative to Bitcoin this year, but two, we’re getting this sort of intrinsic floor because of the value that the assets locked onto the Ethereum blockchain.”
ETH is worth $2,999 at time of writing, down 16% in the last seven days.
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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“But the other way to look at Ethereum is really its price ratio or even its network value ratio to Bitcoin. It currently sits at — this number is 0.032. The long-term average, like the 8-year average, if we were just to trade to that 8-year average, would put Ethereum at around $12,000.
So I think Ethereum is undervalued because number one, the story is gaining relative to Bitcoin this year, but two, we’re getting this sort of intrinsic floor because of the value that the assets locked onto the Ethereum blockchain.”
ETH is worth $2,999 at time of writing, down 16% in the last seven days.
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Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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