“Ethereum has a very strong Lindy effect” – when will it hit the trillion mark?

ETH, the largest altcoin out there, has had a pretty good week. Despite the continuously falling global market capitalization, ETH has seen a 10% increase in the last 7 days. At the time of writing, ETH’s market capitalization is $ 258.3 billion.

ETH / USDT 4-hour chart | Source: Tradingview

Will ETH market capitalization soon hit the trillion dollar standard? Probably can’t. Exponential growth seems impossible at the moment. But what about in the long run? Celia Wan from Dragonfly Research is optimistic. Posts on Blog Your final notes:

“The potential total value of ETH in the distant future is between 3.7 and 4.7 trillion US dollars.”

Well, these numbers may seem a bit far-fetched at first, but ETH will eventually make it. At this point, however, it should be considered whether the Lindy effect is likely to bring something positive for ETH over time. The Lindy Effect can simply be understood to mean that the older something is, the more likely it is to stay in the future. Wan’s blog notes:

“Similar to BTC, ETH has a very strong Lindy effect as the first security in DeFi. When Ethereum and DeFi become the financial layer of the future, ETH will most likely remain one of the most important collateral as it is the first large-scale security and the DeFi ecosystem was built on this platform.

Weekly value stored on the DeFi platform (1 / 2020-5 / 2021) | source: Twitter

ETH can have a greater advantage with the help of DeFi platforms. In particular, DeFi platforms trapped a total of $ 2-3 billion per week in June 2020. That number started growing rapidly in August and is now consistently over $ 20 billion a week. In addition, the value skyrocketed to over $ 60 billion at times.

The ETH also developed remarkably well in the past year. In fact, this old one consistently sets new ATHs at the beginning of this year. The value of ETH has increased by 854.31% in the last 365 days. By comparison, it is clear that the growth of DeFi and the growth of Ethereum are intertwined with a fairly large density. This indicates the long-term impact of ETH’s monetary value. Wan says:

“It is conceivable that ETH will take 10% of Bitcoin’s market share if Ethereum and DeFi continue to grow. If Bitcoin’s potential market capitalization is around $ 4.7-14.6 trillion, ETH’s potential monetary value could be anywhere between $ 0.5 and $ 1.5 trillion.

Additionally, upgrading from Ethereum 2.0 and moving to a PoS consensus mechanism is likely to add security and lower inflation, making it an even more attractive asset.

Valuing ETH as an investment using the above dividend growth model of $ 60.2 billion gives a final value of $ 3.2 trillion over 10 years.

The valuation of ETH as an investment (3.2 trillion US dollars) and its monetary value (0.5-1.5 trillion US dollars) combined will help the market capitalization of old. This brings it to a valuation of $ 3.7 to $ 4.7 trillion. ETH is different from other tokens on the market and will definitely remain the king of altcoins. Renowned analyst Benjamin Cowen to explain:

“ETH has no competitors. Other projects all have their own fields of activity, but are not in direct competition with ETH. “

Minh Anh

According to AMBCrypto

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