Ethereum may be trading far below its “fair value,” according to a broad set of valuation models used across crypto and traditional finance — but one widely respected framework suggests the opposite, raising questions about whether ETH’s current price truly reflects its fundamentals.
The debate over how to properly value the world’s leading smart contract platform intensified this week after new analysis from Ki Young Ju, CEO of CryptoQuant, found that nine out of 12 Ethereum valuation models imply significant upside from current levels. ETH was trading near $3,041 when the analysis was published.
Across all 12 models, a composite fair-value estimate places Ether at roughly $4,836, representing an implied upside of more than 58%.
Multiple Models Point Toward ETH Undervaluation
CryptoQuant’s analysis evaluated a range of metrics from user growth and network activity to financial and economic value capture. Each model received a reliability score from one to three, with three considered most dependable. Eight of the 12 models scored at least a “2” — a threshold that Ki Young Ju says reflects methodologies commonly accepted in academia and institutional finance.
One of the strongest signals comes from App Capital, a model that accounts for all on-chain assets secured by Ethereum, including stablecoins, ERC-20 tokens, NFTs, tokenized RWAs and bridged assets. According to ETHval, App Capital places ETH’s fair price at $4,918.
Metcalfe’s Law — which values a network based on the square of its active user count — suggests that ETH could be worth $9,484, implying the asset may be more than 200% undervalued relative to activity on the network.
Another widely followed approach, the Layer-2 valuation model, prices ETH based on the total value locked across Ethereum’s growing ecosystem of rollups such as Base, Arbitrum, Optimism and Polygon. Under this framework, ETH should trade nearer $4,633, meaning it remains undervalued by roughly 52%.
These models collectively support the view that Ethereum’s long-term economic strength — spanning DeFi, stablecoins, L2 settlement and tokenization — has not yet been reflected in ETH’s spot price.
A Single Model Breaks the Trend — and It Points Sharply Lower
Despite the overwhelmingly bullish outputs, one model sends a starkly different warning. According to ETHval’s methodology, the Revenue Yield valuation model — rated the most reliable of all — indicates that ETH may actually be 57% overvalued at current levels.
This model calculates Ethereum’s fair value based on how much annual revenue (mainly from transaction fees and MEV) the network generates, adjusted through ETH’s staking yield. Under this system, Ethereum should be priced near $1,296, more than $1,700 below current levels.
The bearish signal stems from a sharp drop in fee revenue as the rise of efficient Layer-2 networks has pushed more activity off the base layer. At the same time, competitors like Solana and Binance Smart Chain continue to absorb market share in high-volume consumer transactions, lowering Ethereum’s share of total network revenue.
With fees near multi-year lows, the model suggests the network’s economic throughput no longer justifies ETH trading above $3,000.
Valuing Ethereum Is Becoming Increasingly Complex
The sharp divergence between models underscores a larger issue: Ethereum may be too multifaceted for traditional valuation frameworks to capture accurately.
Some methodologies treat ETH like a tech stock, others like a digital commodity, others like a yield-bearing asset, and some as the native unit powering a global economic settlement engine. This creates wide spreads in estimates — and plenty of room for debate.
Analysts say this tension will intensify as Ethereum expands deeper into rollups, tokenization, stablecoins, and AI-aligned compute markets, all of which influence future ETH demand in different ways.
For now, most models point to considerable upside — but the network’s declining revenue generation remains a critical risk flag for investors tracking ETH’s fundamentals.
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