OBTC - Ether 2030 Price Target And Optimal Portfolio Allocations

2024-06-10 08:40:00 ET

Summary

• We estimate ETH's price to hit $22k by 2030 in our updated base case scenario and explore optimal BTC and ETH allocations in both traditional 60/40 and crypto-only portfolios.
• Driven by a strong value proposition to entrepreneurs, the Ethereum network is likely to continue its rapid market share growth from traditional financial market participants and, increasingly, Big Tech.
• Adding a modest allocation of cryptocurrencies (up to 6%) to a traditional 60/40 portfolio can substantially improve the portfolio’s Sharpe ratio with a relatively minor impact on drawdown.

By Matthew Sigel, Patrick Bush, Denis Zinoviev

We estimate ETH's price to hit $22k by 2030 in our updated base case scenario and explore optimal BTC ( BTC-USD ) and ETH ( ETH-USD ) allocations in both traditional 60/40 and crypto-only portfolios.

We anticipate that spot ether ETFs are nearing approval to trade on U.S. stock exchanges. This development would allow financial advisors and institutional investors to hold this unique asset with the security of qualified custodians, and benefit from the pricing and liquidity advantages characteristic of ETFs. In response, we've updated our financial model and reevaluated the fundamental investment case for ETH. We also performed a series of quantitative analyses on how ether (ETH) interacts with bitcoin (BTC) in a traditional 60/40 portfolio, focusing on the tradeoff between risk and return....

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