Ethereum

Cryptocurrency

random

View

Trillion

<p>Cryptocurrency is here to stay &#8211; or at least that&#8217;s what this recent rally has been telling us. With Bitcoin hitting a recent Year-To-Date High of $31,000, and Ethereum following in it&#8217;s footsteps following the Shapella upgrade, faith in Web3.0 has seemingly returned to all-time-highs.</p>



<p>With that in mind, we can now return to once again chasing a new high in net worth &#8211; a goal many of us thought would only come in 2-4 years. As the elusive millionaire status returns to creep into many of our minds (or maybe just mine), we have to wonder &#8211; how much ETH exactly do we need to get there?</p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/cardano-to-yield-farming-crypto-portfolio/">Cardano To US$10? How I Recovered From A 70% Portfolio Drawdown</a></p>



<h2 id="a-primer-on-cryptocurrency-valuation-models">A Primer on Cryptocurrency Valuation Models</h2>



<p>In an <a href="https://yusoffkim.substack.com/p/on-models-and-memes">extremely naïve article</a> I published earlier in my crypto journey, I reflected that the world of Web3.0 was far too young to have it&#8217;s assets graphed out by TradFi valuation models.</p>



<figure class="wp-block-image size-full"><img decoding="async" width="896" height="323" src="https://chaindebrief.com/wp-content/uploads/2023/04/image-25.png" alt="" class="wp-image-37326" srcset="https://chaindebrief.com/wp-content/uploads/2023/04/image-25.png 896w, https://chaindebrief.com/wp-content/uploads/2023/04/image-25-300x108.png 300w, https://chaindebrief.com/wp-content/uploads/2023/04/image-25-768x277.png 768w" sizes="(max-width: 896px) 100vw, 896px" /></figure>



<p>While these &#8220;compare market cap of A to B&#8221; were all the rage during the bull market, the harsh reality was that almost no projects lived up to their potential.</p>



<p>Even when they did, poor tokenomics, sudden rugs, and the wrath of a bear market eventually forced them into slow, painful deaths. Deflationary mechanics and veTokenomics were also susceptible to the hyper volatility of Web3.0 &#8211; making it hard to &#8220;HODL&#8221; at the bottom.</p>



<p>Regardless, Bitcoin (and Ethereum) have managed to grow exponentially over the last few cycles, with the former adding a zero during every bull market. </p>



<p>That is to say that even if most of Web3.0 were to evaporate into thin air, it is likely that our two blue-chips will eventually pave the way for more exciting projects in the coming decade, be they ponzis or potential unicorns.</p>



<p>Furthermore, while these valuation models in no way guarantee that &#8220;X&#8221; amount of $ETH will translate into $1M, making an educated guess can help us set the foundation for accumulation, or at least prevent us from shifting goalposts too frequently.</p>



<h2 id="strong-if-bitcoin-hits-1m-where-will-eth-be-strong"><strong>If Bitcoin Hits $1M, Where Will ETH Be?</strong></h2>



<p>Two halving cycles will occur from today till 2030. By that time, only 1.5625 Bitcoin will be produced per block.</p>



<p>Assuming demand stays constant, that translates to a 4x reduction in supply, a model that results in the $1 million Bitcoin price prediction that has plagued headlines recently. </p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">History doesn&#39;t predict the future. But this is the history. 4 year cycles so far. <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a><br><br>(Source: Data is public. Table made by <a href="https://twitter.com/gautamchhugani?ref_src=twsrc%5Etfw">@gautamchhugani</a>, I think) <a href="https://t.co/deG75mNS84">pic.twitter.com/deG75mNS84</a></p>&mdash; CZ <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f536.png" alt="🔶" class="wp-smiley" style="height: 1em; max-height: 1em;" /> Binance (@cz_binance) <a href="https://twitter.com/cz_binance/status/1620058528747753473?ref_src=twsrc%5Etfw">January 30, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>While a 33x in the world&#8217;s leading cryptocurrency by market capitalization seems ludicrous to us today, it may very well not be the case in a few years.</p>



<p>Over<a href="https://www.blockchain-council.org/cryptocurrency/how-many-bitcoins-are-left/#:~:text=Summary%E2%80%8B,million%20left%20to%20be%20mined."> 80% of Bitcoin&#8217;s maximum supply</a> have been mined, and a price of $1 million per token at maximum supply translates into a market capitalization of $21 Trillion &#8211; roughly double of the current gold market capitalization.</p>



<p>While I don&#8217;t personally believe that Bitcoin will double the market cap of gold, let&#8217;s take this into consideration for a second. </p>



<p>Ethereum currently accounts for approximately slightly under half of Bitcoin&#8217;s market capitalization. Assuming it maintains it&#8217;s total supply and manages to achieve exactly half of Bitcoin&#8217;s market capitalization, this would translate to an $ETH price of $8770.</p>



<p>$87706 is a 41x from current prices.</p>



<p>To be a millionaire by 2030, this would require you to hold 11.4 $ETH, or $24,114 at current prices.</p>



<p><strong>Also Read: </strong><a href="https://chaindebrief.com/the-shocking-truth-about-bitcoins-limited-supply/">The Shocking Truth About Bitcoin’s Limited Supply</a></p>



<h2 id="a-more-technical-breakdown">A More Technical Breakdown </h2>



<p>While scouring the internet to find a better valuation model (that did not flip constantly depending on the market), I stumbled across <a href="https://www.youtube.com/watch?v=e_Nl9SLifI0">this YouTube video by InvestAnswers.</a></p>



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">Behold the remarkable stability of the digital behemoth, <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a>. For the past 50 hours, brushes off CPI, it has been tightly confined to a minuscule 1% range 95% of the time. Peculiar lack of volatility is nothing short of mystifying! <a href="https://t.co/LGRJVclvuD">pic.twitter.com/LGRJVclvuD</a></p>&mdash; InvestAnswers (@invest_answers) <a href="https://twitter.com/invest_answers/status/1646373423592140800?ref_src=twsrc%5Etfw">April 13, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<p>While slightly outdated, it does take a more reasonable stance than the Balaji prediction of $1M per Bitcoin.</p>



<p>I&#8217;ll let you watch the whole video if you want a thorough breakdown. </p>



<p>But in essence:</p>



<ul>
<li>Worst Case Scenario: $25,606</li>



<li>Conservative Model: $34,406</li>



<li>Aggressive Model: $55,199</li>
</ul>



<p>These valuations assume that Bitcoin will flip gold by 2030, and therefore reach a over $10T in market capitalization.</p>



<p>The worst case scenario uses a 22% annual growth rate. The conservative model assumes Ethereum hits 50% of Bitcoin&#8217;s market capitalization, and the aggressive case uses a ratio of 1ETH=0.1BTC.</p>



<p></p>



<p>Assuming these numbers, to be a millionaire you will need:</p>



<ul>
<li>Worst case scenario: 39 ETH or $82,000 at current prices</li>



<li>Conservative Model: 29 ETH or $61,355 at current prices</li>



<li>Aggressive Model: 18 ETH or $38,243 at current prices</li>
</ul>



<h2 id="strong-my-personal-prediction-strong"><strong>My Personal Prediction</strong></h2>



<p>If you&#8217;re wondering why you should listen to the thoughts and price prediction of a random writer &#8211; you don&#8217;t have to. In fact, I&#8217;ll more likely be wrong than right.</p>



<p>Instead, I&#8217;d like you to open your mind to some possible valuations of ETH and how to adjust accordingly.</p>



<p>The current train of thought on crypto Twitter is that ETH will hit $10,000 by the next cycle, and presumably be up only from here on out. So do we just front-load everything in now?</p>



<p>Let&#8217;s take the safe estimate of 39 $ETH, or $82,000 at current prices, needed to become a millionaire by 2030. </p>



<p>Most of us do not have $82,000 to allocate to a single asset right now. Furthermore, if you assume Ether is going to exponentially rise, the average price you will be allocating at will drastically increase over the years.</p>



<figure class="wp-block-image size-full is-resized"><img decoding="async" src="https://chaindebrief.com/wp-content/uploads/2023/04/image-27.png" alt="" class="wp-image-37330" width="798" height="486" srcset="https://chaindebrief.com/wp-content/uploads/2023/04/image-27.png 590w, https://chaindebrief.com/wp-content/uploads/2023/04/image-27-300x183.png 300w" sizes="(max-width: 798px) 100vw, 798px" /></figure>



<p>Even if we sandbag and accumulate ETH only at the lows of every market cycle (assuming a CAGR of 22% and a starting price of $2,100), you would only have accumulated around 21 $ETH by then &#8211; far less than what&#8217;s needed to be a millionaire.</p>



<p><em><strong>So either we yolo on small caps or treat ETH as a bank account?</strong></em></p>



<p>One thing I&#8217;ve taken away from all these price predictions is that Ethereum is still one of the greatest bets of our lifetime. A &#8220;safe&#8221; 5x in just a few years is practically unheard of.</p>



<p>Realistically, ETH&#8217;s chart will also be subject to more volatility than what was assumed in the ETH accumulated vs. Year chart above. </p>



<figure class="wp-block-embed is-type-rich is-provider-instagram wp-block-embed-instagram"><div class="wp-block-embed__wrapper">
<blockquote class="instagram-media" data-instgrm-captioned data-instgrm-permalink="https://www.instagram.com/p/Cq-RBeTSXqD/?utm_source=ig_embed&amp;utm_campaign=loading" data-instgrm-version="14" style=" background:#FFF; border:0; border-radius:3px; box-shadow:0 0 1px 0 rgba(0,0,0,0.5),0 1px 10px 0 rgba(0,0,0,0.15); margin: 1px; max-width:658px; min-width:326px; padding:0; width:99.375%; width:-webkit-calc(100% - 2px); width:calc(100% - 2px);"><div style="padding:16px;"> <a href="https://www.instagram.com/p/Cq-RBeTSXqD/?utm_source=ig_embed&amp;utm_campaign=loading" style=" background:#FFFFFF; line-height:0; padding:0 0; text-align:center; text-decoration:none; width:100%;" target="_blank"> <div style=" display: flex; flex-direction: row; align-items: center;"> <div style="background-color: #F4F4F4; border-radius: 50%; flex-grow: 0; height: 40px; margin-right: 14px; width: 40px;"></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center;"> <div style=" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 100px;"></div> <div style=" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; width: 60px;"></div></div></div><div style="padding: 19% 0;"></div> <div style="display:block; height:50px; margin:0 auto 12px; width:50px;"><svg width="50px" height="50px" viewBox="0 0 60 60" version="1.1" xmlns="https://www.w3.org/2000/svg" xmlns:xlink="https://www.w3.org/1999/xlink"><g stroke="none" stroke-width="1" fill="none" fill-rule="evenodd"><g transform="translate(-511.000000, -20.000000)" fill="#000000"><g><path d="M556.869,30.41 C554.814,30.41 553.148,32.076 553.148,34.131 C553.148,36.186 554.814,37.852 556.869,37.852 C558.924,37.852 560.59,36.186 560.59,34.131 C560.59,32.076 558.924,30.41 556.869,30.41 M541,60.657 C535.114,60.657 530.342,55.887 530.342,50 C530.342,44.114 535.114,39.342 541,39.342 C546.887,39.342 551.658,44.114 551.658,50 C551.658,55.887 546.887,60.657 541,60.657 M541,33.886 C532.1,33.886 524.886,41.1 524.886,50 C524.886,58.899 532.1,66.113 541,66.113 C549.9,66.113 557.115,58.899 557.115,50 C557.115,41.1 549.9,33.886 541,33.886 M565.378,62.101 C565.244,65.022 564.756,66.606 564.346,67.663 C563.803,69.06 563.154,70.057 562.106,71.106 C561.058,72.155 560.06,72.803 558.662,73.347 C557.607,73.757 556.021,74.244 553.102,74.378 C549.944,74.521 548.997,74.552 541,74.552 C533.003,74.552 532.056,74.521 528.898,74.378 C525.979,74.244 524.393,73.757 523.338,73.347 C521.94,72.803 520.942,72.155 519.894,71.106 C518.846,70.057 518.197,69.06 517.654,67.663 C517.244,66.606 516.755,65.022 516.623,62.101 C516.479,58.943 516.448,57.996 516.448,50 C516.448,42.003 516.479,41.056 516.623,37.899 C516.755,34.978 517.244,33.391 517.654,32.338 C518.197,30.938 518.846,29.942 519.894,28.894 C520.942,27.846 521.94,27.196 523.338,26.654 C524.393,26.244 525.979,25.756 528.898,25.623 C532.057,25.479 533.004,25.448 541,25.448 C548.997,25.448 549.943,25.479 553.102,25.623 C556.021,25.756 557.607,26.244 558.662,26.654 C560.06,27.196 561.058,27.846 562.106,28.894 C563.154,29.942 563.803,30.938 564.346,32.338 C564.756,33.391 565.244,34.978 565.378,37.899 C565.522,41.056 565.552,42.003 565.552,50 C565.552,57.996 565.522,58.943 565.378,62.101 M570.82,37.631 C570.674,34.438 570.167,32.258 569.425,30.349 C568.659,28.377 567.633,26.702 565.965,25.035 C564.297,23.368 562.623,22.342 560.652,21.575 C558.743,20.834 556.562,20.326 553.369,20.18 C550.169,20.033 549.148,20 541,20 C532.853,20 531.831,20.033 528.631,20.18 C525.438,20.326 523.257,20.834 521.349,21.575 C519.376,22.342 517.703,23.368 516.035,25.035 C514.368,26.702 513.342,28.377 512.574,30.349 C511.834,32.258 511.326,34.438 511.181,37.631 C511.035,40.831 511,41.851 511,50 C511,58.147 511.035,59.17 511.181,62.369 C511.326,65.562 511.834,67.743 512.574,69.651 C513.342,71.625 514.368,73.296 516.035,74.965 C517.703,76.634 519.376,77.658 521.349,78.425 C523.257,79.167 525.438,79.673 528.631,79.82 C531.831,79.965 532.853,80.001 541,80.001 C549.148,80.001 550.169,79.965 553.369,79.82 C556.562,79.673 558.743,79.167 560.652,78.425 C562.623,77.658 564.297,76.634 565.965,74.965 C567.633,73.296 568.659,71.625 569.425,69.651 C570.167,67.743 570.674,65.562 570.82,62.369 C570.966,59.17 571,58.147 571,50 C571,41.851 570.966,40.831 570.82,37.631"></path></g></g></g></svg></div><div style="padding-top: 8px;"> <div style=" color:#3897f0; font-family:Arial,sans-serif; font-size:14px; font-style:normal; font-weight:550; line-height:18px;">View this post on Instagram</div></div><div style="padding: 12.5% 0;"></div> <div style="display: flex; flex-direction: row; margin-bottom: 14px; align-items: center;"><div> <div style="background-color: #F4F4F4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(0px) translateY(7px);"></div> <div style="background-color: #F4F4F4; height: 12.5px; transform: rotate(-45deg) translateX(3px) translateY(1px); width: 12.5px; flex-grow: 0; margin-right: 14px; margin-left: 2px;"></div> <div style="background-color: #F4F4F4; border-radius: 50%; height: 12.5px; width: 12.5px; transform: translateX(9px) translateY(-18px);"></div></div><div style="margin-left: 8px;"> <div style=" background-color: #F4F4F4; border-radius: 50%; flex-grow: 0; height: 20px; width: 20px;"></div> <div style=" width: 0; height: 0; border-top: 2px solid transparent; border-left: 6px solid #f4f4f4; border-bottom: 2px solid transparent; transform: translateX(16px) translateY(-4px) rotate(30deg)"></div></div><div style="margin-left: auto;"> <div style=" width: 0px; border-top: 8px solid #F4F4F4; border-right: 8px solid transparent; transform: translateY(16px);"></div> <div style=" background-color: #F4F4F4; flex-grow: 0; height: 12px; width: 16px; transform: translateY(-4px);"></div> <div style=" width: 0; height: 0; border-top: 8px solid #F4F4F4; border-left: 8px solid transparent; transform: translateY(-4px) translateX(8px);"></div></div></div> <div style="display: flex; flex-direction: column; flex-grow: 1; justify-content: center; margin-bottom: 24px;"> <div style=" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; margin-bottom: 6px; width: 224px;"></div> <div style=" background-color: #F4F4F4; border-radius: 4px; flex-grow: 0; height: 14px; width: 144px;"></div></div></a><p style=" color:#c9c8cd; font-family:Arial,sans-serif; font-size:14px; line-height:17px; margin-bottom:0; margin-top:8px; overflow:hidden; padding:8px 0 7px; text-align:center; text-overflow:ellipsis; white-space:nowrap;"><a href="https://www.instagram.com/p/Cq-RBeTSXqD/?utm_source=ig_embed&amp;utm_campaign=loading" style=" color:#c9c8cd; font-family:Arial,sans-serif; font-size:14px; font-style:normal; font-weight:normal; line-height:17px; text-decoration:none;" target="_blank">A post shared by Chain Debrief | Crypto Education (@chaindebrief)</a></p></div></blockquote><script async src="//platform.instagram.com/en_US/embeds.js"></script>
</div></figure>



<p>One way to become a millionaire faster (and for less money) is to take advantage of the crypto market&#8217;s volatility, and dynamically DCA into the markets.</p>



<p>This seems easy, but takes a lot of conviction &#8211; something that only comes with an extended stay. ironically, it gets harder to press buy when ETH goes -90% into -90% instead of when everything is pumping.</p>



<p>By taking advantage of this,<a href="https://chaindebrief.com/top-5-crypto-airdrops-to-look-out-for/"> airdrops</a>, and<a href="https://chaindebrief.com/market-cycles-crypto-identify-tops-take-profits/"> random 100Xs</a> along the way, we can get to our goals much quicker than through conventional means.</p>



<p>Once again, while this seems easy enough &#8211; 1000% gains on random shitcoins will test our conviction, preventing us from selling tokens, and forcing us to buy in again at random all-time-highs.</p>



<p>Personally, I believe that ETH will be drastically above the $10,000 price prediction set out by many analysts today. Given the successful Shapella upgrade, <a href="https://ultrasound.money/">EIP-1559</a>, and the rampant rise of Layer 2s (which use $ETH for gas fees), the value accrual to Ether seems extremely asymmetric to the upside.</p>



<h2 id="closing-thoughts">Closing Thoughts</h2>



<p>Instead of starting at portfolios All-Time-Highs, I prefer to track my worst points, making a new low every cycle. Thankfully, this bear market has been very good to most who did not leave the space.</p>



<p>Generously taking from a total data set of 1 bull market and 1 bear market, my low in 2030 would be approximately a 25x from here, meaning I would require $40,000 in starting capital, a surprisingly achievable goal.</p>



<p>But I&#8217;ll probably get rugged along the way and still be poor.</p>



<p>Regardless, one takeaway from all the analysis is that if you believe in Web3.0 surviving till 2030, ETH, and Bitcoin, will both likely put in a 10x from here onwards.</p>



<p>And who&#8217;s to say that a 10x in under a decade isn&#8217;t life changing money?</p>



<p><strong>Also Read:</strong> <a href="https://chaindebrief.com/whales-begin-to-dump-as-crypto-fear-and-greed-reaches-yearly-high/">Whales Begin To Dump as Crypto Fear and Greed Reaches Yearly high</a></p>



<p><em>[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]</em></p>



<p><em>Featured Image Credit:</em>&nbsp;Analytics Insights</p>



<p></p>



<p></p>

How Much ETH Do You Need To Be a Millionaire By 2030?

目录

Chain Debrief

发布于 2023年4月17日的其他文章

Over 1 Million ETH Withdrawn Since Shanghai Hard Fork Went Live

TMS Network (TMSN) Takes the Crypto World by Storm, Surpassing Mask Network (MASK) and Tron (TRX)...

Global Fragmentation Underway With US Getting Lonely, Says Former Treasury Secretary Larry Summers

ChainLink price analysis: LINK retracing resistance after a breakout at $8

Gravity Finance Launches Flagship Product Silos to Enhance DeFi Automation and Risk Management

BUIDL-Weekly: 10APR23 - 16APR23

订阅我们免费的电子期刊，获取每日最新加密领域动态！