Although most models predicted ETH prices above $4000, one critical valuation model diverged from the trend, suggesting that ETH may be overvalued.

According to Ki Young Ju, a market analyst and CEO of the cryptocurrency market analysis platform CryptoQuant, the native currency of the Ethereum network, Ethereum (ETH), valued at $3,031, is estimated to be undervalued in nine out of twelve commonly used valuation models.

Using the compounded "fair value" of all 12 valuation models, Ethereum is priced at around $4,836, an increase of over 58% compared to its price at the time of writing.

Each valuation model was rated on a scale of three degrees of reliability, with three models deemed the most reliable. Eight of the 12 models distinguished themselves with a reliability rating of at least two. Joe stated: "These models were designed by trusted experts from academia and traditional finance."

According to ETHval, the App Capital valuation model, which considers the total on-chain assets including stablecoins, ERC-20 tokens, non-fungible tokens (NFTs), real-world assets (RWAs), and interlinked assets, values Ethereum at a fair price of $4,918.

Using Metcalfe's law, which states that the value of a network grows proportionally to the square of the number of actual active users or nodes in the network, an Ethereum price of $9,484 is expected, indicating that the asset is estimated to be undervalued by over 211%, according to the model.

Using the layer two (L2) framework, which considers the total value locked (TVL) in the Ethereum ecosystem for the layer two expansion network, a price of $4,633 per Ethereum is expected, implying that Ethereum is estimated to be undervalued by approximately 52%.

The Ethereum community and analysts continue to discuss how to properly value the world's first smart contracts platform, with many stating that traditional valuation models are inadequate for assessing emerging digital assets and decentralized blockchain networks.

Despite mostly optimistic forecasts, one valuation model indicates that Ethereum's value is significantly overestimated.

The revenue return valuation model, which evaluates Ethereum based on the annual revenue generated by the network, divided by the staking return on Ethereum, suggests that Ethereum, at its current prices above $3,000, is overvalued by more than 57%.

The revenue return model is considered the most reliable valuation model for accurately pricing Ethereum, according to ETHval's standards and methodology.

Ethereum is expected to be priced at around $1,296, according to the model, highlighting the decline in Ethereum network revenues as fees drop to record lows, and competing networks gain a share of its market.

Cointelegraph