'Undervalued' Ethereum Could Hit $9,000: Bloomberg Analysts Spell Out Bull Case For Merge

An undervalued Ethereum ETH/USD could close the valuation gap as the Merge approaches, Bloomberg analysts have said.

What Happened: In a recent Crypto Outlook report from Bloomberg Intelligence, analysts applied a discounted cash flow (DCF) model to the world’s second-largest cryptocurrency.

“The upcoming Merge, shifting Ethereum from a proof-of-work model to proof-of-stake, will convert Ether into an equity-like instrument with elegant supply/demand dynamics that could drive significant interest in the asset,” they said, noting that the DCF analysis showed the cryptocurrency to be currently undervalued.

Modeling cash flows after transaction fees, analysts estimate that Ethereum is on track to generate $12.7 billion in 2022.

In the most optimistic scenario, the analysts arrived at a valuation of $9,328 for Ethereum, which represents an approximate 213% upside from current prices.

They applied a price/earnings exit methodology when valuing the digital asset, with the assumption that Proof-of-Stake blockchains only have indirect costs in the form of new issuance, turning cash flows into profits.