Ether should be 55% lower and is facing tough competition from solana and other blockchains, JPMorgan strategist says

Gold coins with the Ethereum logo stacked in front of a U.S. 1 dollar bill.
The cryptocurrency ether runs on the ethereum network. Dado Ruvic/Reuters
  • Ether’s fair value is around $US1,500 ($AU2,057) based on measures of network activity, a JPMorgan strategist has said.
  • That’s roughly 55% lower than Friday’s price of around $US3,470 ($AU4,759) for ethereum’s token.
  • Nikolaos Panigirtzoglou said ethereum is facing growing smart-contract competition from other blockchains.
  • See more stories on Insider’s business page.

Ether’s fair value is around $US1,500 ($AU2,057) based on measures of network activity, a JPMorgan global market strategist has said. That’s roughly 55% lower than Friday’s price of around $US3,470 ($AU4,759) for ethereum’s token.

Nikolaos Panigirtzoglou told Insider that the ethereum network is less attractive than the current price of ether suggests, as it’s facing growing competition from blockchains such as solana and cardano.

Panigirtzoglou, who has become JPMorgan’s crypto expert, said he and his team have looked at various measures of activity on the ethereum network to try to work out a fair value for the token.

JPMorgan reckons that a larger base of miners and users implies greater adoption and makes the network more attractive for product developers.

“We look at the hashrate and the number of unique addresses to try to understand the value for ethereum. We’re struggling to go above $US1,500 ($AU2,057),” he said.

“There is a question mark here. The current price is expressing an exponential increase in usage and traffic that might not materialise.”

Ether – the cryptocurrency that runs on the ethereum blockchain – has climbed more than 850% in price against the dollar over the last year during a widespread crypto boom.

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Yet Panigirtzoglou told Insider recently that ethereum’s key selling point – that developers can build decentralized apps and smart contracts upon it – “can easily be replicated by other networks.”

“It’s not unique,” he said. “You’re already seeing competition from binance, competition from solana. And there are going to be more in the future.” Panigirtzoglou also cited cardano, which has recently upgraded to allow the creation of smart contracts.

However, Jack O’Holleran, CEO at ethereum development company Skale Labs, told Insider that ethereum is likely to remain the dominant decentralized finance blockchain, especially given upcoming network changes that should help it become larger and faster.

“The vast majority of smart contract developers are building in the ethereum ecosystem,” O’Holleran said. “Despite major partnerships being announced on other chains, we still see the absolute majority of (developers) being pulled into the ethereum vortex.”

Decentralized finance, or DeFi, uses crypto technology to create financial products that don’t require centralized authorities. For example, they could enable trading without clearing houses or “smart contracts” that automatically pay out interest on loans.