Standard Chartered notes that Ethereum is undervalued as treasury companies and ETFs have absorbed 4.9% of the supply in the past three months.
Standard Chartered has provided a positive assessment of Ethereum and businesses incorporating ETH into their treasury, arguing that they are undervalued by the market despite the recent strong rise of the world's second-largest digital asset.
Geoffrey Kendrick, Head of Global Digital Asset Research at Standard Chartered, reported on Tuesday that Ethereum Digital Asset Treasury (DAT) companies have purchased 2.6% of the total circulating ether since June. During the same period, spot ETH ETFs have added 2.3%, totaling 4.9% of the supply absorbed in less than three months.
This strong buying activity contributed to ETH reaching a historical peak of $4,955 on August 24. However, Kendrick still considers ETH and Ethereum treasury companies to be 'cheap at the current price,' while maintaining the view that treasury businesses could ultimately hold 10% of the circulating ETH supply.
Source: Standard Chartered
He specifically pointed to the case of Ethereum DAT BitMine Immersion aiming to hold 5% of the total ETH supply, indicating the strong ambitions of companies to accumulate this digital asset.
Undervalued compared to Strategy
Standard Chartered researchers also analyzed the valuation comparison between ETH treasury companies and Strategy (MSTR) - the pioneering company in integrating Bitcoin into corporate treasury. Companies like SharpLink Gaming (SBET) and BitMine Immersion (BMNR) currently have lower valuations than Strategy when assessed on the basis of net asset value (NAV multiples).
Source: Standard Chartered
Kendrick argues that ETH treasury companies have even more of an advantage over Strategy due to the ability to benefit from ETH's 3% staking yield, while Bitcoin does not have a similar feature. 'I see no reason why their NAV multiples should be lower than MSTR,' he emphasized.
SBET announced last week that it will conduct a share buyback if the NAV multiple falls below 1.0, creating a 'hard floor' for valuation according to Kendrick's assessment. Earlier this month, he asserted that Ethereum DATs are now 'very worthwhile investments' as they offer a distinct advantage over U.S. spot ETH ETFs, which have yet to participate in staking or DeFi.
Kendrick maintains a price target of ETH at $7,500 by the end of this year and $25,000 by 2028, considering the recent correction as a 'great buying opportunity.' Currently, ETH is trading around $4,530.
As one of the most optimistic voices in the cryptocurrency asset market, Kendrick also made other ambitious forecasts including Bitcoin at $200,000 by the end of the year and $500,000 by 2028, BNB reaching $2,775 by 2028, along with expectations that the stablecoin market will explode to $2 trillion by the end of 2028.
