Why (some) economists believe $20,000 Ethereum is a realistic price target.

I typically skim past headlines with aggressively high price targets in crypto. Feels like clickbait. However, this simple analysis from macro economist DH Taylor caught my attention.

Earlier this week, as Ethereum rose to $1,439 per coin, it crushed its previous all-time high. Taylor suggests that this is just the start. In fact, he believes that a rise to $20,000 per token is totally feasible. Here’s the hypothesis behind this lofty price target.

TLDR_

• Taylor uses Metcalfe’s Law to derive a target price of $20K per Ethereum
• Metcalfe’s Law maps the rate of growth of a network using the square of the number of its users
• Using Metcalfe’s Law, the author believes Ethereum will repeat Bitcoin’s meteoric rise
• Bullish pundits, including Raoul Pal echo this sentiment
• Mark Cuban tweeted that he owns and HODLs crypto

While a rise from $1,400 per ETH to $20,000 may sound implausible, that would represent a 1400% gain. It should be noted that Ethereum had a similar run between May 2017 and January 2018.

Mark Cuban has entered the chat_

Last week investors Mark Cuban and Raoul Pal had a lively Twitter convo discussing Bitcoin, Ether, and other cryptocurrencies. Pal has been especially bullish (positive) about the industry overall. In a thread he echoed Taylor’s price target, suggesting that Ether could outperform Bitcoin this year and hit $20,000 in the future. 

In a related thread, Mark Cuban shared his views on cryptocurrencies and decentralized finance (DeFi). In it he compared the blockchain market landscape to the Dot-com Bubble.

Let’s see what the year ahead holds for Ethereum. I’m excited about its potential. What are your thoughts?

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