A new analysis from digital asset investment firm VanEck outlines an aggressive long-term price target for Ethereum's native token ETH, forecasting it could reach $22,000 by 2030 in their base case scenario.

The comprehensive report lays out VanEck's framework for valuing the world's second-largest cryptocurrency. Their model projects Ethereum generating $66 billion in free cash flows accruing to ETH holders by 2030, to which they apply a 33x multiple to derive a $2.2 trillion "fully diluted valuation" for the network.

At the core of VanEck's bullish thesis is the view that Ethereum's transition to Proof-of-Stake will unlock massive scaling potential, enabling it to become the base layer for a global crypto-native financial system. Activities like lending, trading, payments and tokenized asset issuance across DeFi and Web3 use cases are expected to generate $78.5 billion in annual revenue on Ethereum by 2030 in their base forecast.

"We estimate the total addressable market (TAM) to be $15 trillion based on annual revenues in these industry verticals: Finance, Banking, Payments ($10.9T), Marketing, Advertising, Social, Gaming ($1.1T), Infrastructure ($1.8T), and Artificial Intelligence ($1.4T)," the report stated.

VanEck applies assumptions around the percentage of these revenues that will be captured by crypto applications, Ethereum's share of that market, and the protocol's expected "take rates" on economic activity. Their model sees Ethereum's highest penetration in areas like advertising, social media and gaming at 20%.

One notable inclusion is projecting Ethereum to generate $1.2 billion in direct revenue from AI use cases by 2030, making up around 2% of the protocol's topline. VanEck cites Ethereum's unique advantages like decentralized data provenance as drivers of AI business model disruption.

Beyond just transaction fees, the report outlines multiple other revenue streams for Ethereum enabled by its move to Proof-of-Stake. These include MEV extraction (18% of forecasted 2030 revenue), Layer 2 settlement payments (76%), and income from staking as a "Security-as-a-Service" for DeFi apps (4.5%).

While noting the speculative nature of their $22,000 price forecast, the analysts argue Ethereum is a "revolutionary asset" providing exposure to "a high-growth, internet-native commercial system." ETH is framed as "Digital Oil," "Programmable Money," a "Yield Bearing Commodity," and potentially an "Internet Reserve Currency" for Web3 applications.

VanEck sees competition from high-performance Layer 1 blockchains, regulatory obstacles, and the potential for legacy financial players to adapt as key risks to Ethereum's decade-long growth trajectory.

Alongside the price modelling, the report provides evidence that modestly allocating 3% each to BTC and ETH within a traditional 60/40 portfolio materially enhances risk-adjusted returns with minimal additional drawdown over the 2015-2024 study period.

VanEck is a mega digital assets investment firm, offering a range of cryptocurrency services including spot Bitcoin ETFs. The firm's research arm closely tracks developments across leading crypto protocol