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Ahead of Major Upgrade, Metrics Point to Ethereum being Undervalued

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Ethereum is one blockchain project, and cryptocurrency, that has ushered in a new generation for the ecosystem as programmable blockchains and smart contracts came about thanks to this project. Even with this shake up of the space, Ethereum has probably not met its potential, but it is trying to. 

The next step in the evolution of Ethereum is a major upgrade which is scheduled to happen in the following months where the blockchain will change its algorithm to be proof-of-stake rather than proof-of-work in order to improve its performance. But, for the ETH cryptocurrency, there is also a lot going on. 

New research from analytics firm Blockfyre shows the price of Ethereum is one aspect of the project that is actually lagging behind as the rest of the other factors continue to march towards the big upgrade. Ethereum has never really been about the price, but being undervalued at this stage could spell a big price move in the coming months. 

Four measures

Blokfyre has indicated that four key metrics of the Ethereum ecosystem: developer activity, gas usage, miner balances, and the average age of invested dollars; have been measured to determine that ETH should be worth more than it currently is. 

It starts with developer activity as Ethereum has been one of the more active projects and its growth in development has been very much unlinked with its price.

“Since 2014, the Ethereum foundation and its developers have constantly increased the development activity for the network, regardless of what the price has been doing. This indicates the health of the network, being positive for investors,” Blockfyre states.

Additionally, the Gas usage recently hit an all time high which is another sign of increasing growth and potential.

“The amount of Gas Used on the network is constantly increasing and even hitting ATHs at the moment, indicating the growing adoption of the Ethereum network,” the research added.

When looking at the metrics around ETH, it is also shown there is some ‘hodling’ going on.

Mean Dollar Invested Age. This measures for how long ETH has stayed in its address without being moved. Since 2018, this metric has constantly increased, while recently hitting ATHs, showing that investors prefer to accumulate and hold at these price levels.

Finally, in a similar vein, the miner balance is also pointing towards a price rise being imminent for ETH

“More interestingly, the same applies to the ETH Miner’s Balance. This indicates that even Miners, who actually need to sell their mining rewards to cover their expenses, prefer to hold at current price levels.”

Darryn Pollock
Darryn has been interested in the blockchain and cryptocurrency space since he heard about Bitcoin in 2015. He then decided to use his journalism degree to report on this fascinating fintech space in 2016, and has not looked back since.

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