- Fundstrat’s Lee believes that ETH could benefit from the expected stablecoin boom
- On-chain indicators suggested that ETH was undervalued at $2.5k
Ethereum [ETH] could be grossly undervalued at press time prices if the stablecoin market explodes to $3.7 trillion by 2030. This was the evaluation that was implied and shared by Fundstrat’s Chief Analyst Tom Lee.
He was reacting to U.S Treasury Secretary Scott Bessent’s 15x stablecoin surge target by 2030. Lee noted,
“USDT, USDC represent 25%-30% of Ethereum network fees today $CRCL. A 15x rise equal exponential growth in ETH network usage. Ethereum is a direct beneficiary of GENIUS Act and coming surge in stablecoins.”
Is ETH the stablecoin beta?
Here, it’s worth pointing out that there was no significant and immediate price reaction on ETH’s charts after the GENIUS Act was passed this week. In fact, the immediate beneficiaries of the bill were Circle’s CRCL and Coinbase’s COIN as both pumped by double digits.
Perhaps ETH’s reaction was sluggish because the broader market was focused on the geopolitical tensions between Israel and Iran.
That being said, Lee’s statement on stablecoin’s 30% dominance in Ethereum network fees is true. Over the past 30 days of trading, Circle and Tether contributed over $700 million to Ethereum network fees.
In fact, the top three fee contributors to the chain were Tether, Circle and Ethena – All stablecoin issuers.
Source: DeFiLlama
Explosive 15x stablecoin growth, from its current $250 billion market size, could expose the chain to massive network traction in terms of fees.
That being said, is the asset undervalued at its press time price? Well, according to its MVRV Z-score, ETH may be relatively cheap at a price of $2.5k.
Notably, in the current cycle, ETH would peak at $4k if the indicator tags 2 or 1.5 on the charts.
Source: Glassnode
Assuming the trend continues for the rest of the cycle, the current reading of 0.4 means there is ample room for growth before ETH hits a local price peak.
In fact, the MVRV pricing bands also revealed that ETH could peak at around $4.8k or $6.4k if historical trends repeat.
Source: Glassnode
