Ethereum price of $ 1,400 was a bargain

If you put it on Marcel Pechman of Cointelegraph asks, then the Ethereum price of $1,400 on March 10, 2023 was a bargain. That’s an opinion that’s hard to deny considering its current price of $1,761, which means Ether is up about 25.7 percent since then. According to Pechman, it is even a matter of time before the price of Ethereum breaks the $ 2,000 mark again.

Ethereum price of $ 2,000?

Pechman writes that the total value currently locked up in the Ethereum network is about $30 billion. With this he refers to the Ethers that are in the Proof-of-Stake contract of the blockchain. Measured from 24 November 2022, this represents an increase of 30 percent. For that reason, according to Pechman, you should expect a price increase of 30 percent in that period.

However, that was not the case, as Ether was trading at $1,400 on March 10, 2023. That price meant ‘only’ an increase of 8 percent compared to November 24. In that respect, according to Pechman, there is a lot of noise between the value of Ethers in smart contracts and the price of Ethereum.

“The 22 percent difference between the total value in the network and the 8 percent increase in the price implies that the price should have been around $1,700 earlier. That level was reached three days later on March 13. This simple model ignores a number of variables, but it does provide an indication based on historical data,” says Pechman.

Ethereum is deflationary

Pechman then writes a piece about the mechanisms that ensure that Ethereum can currently call itself a deflationary asset. Since the introduction of EIP-1559 and Proof-of-Stake, the supply of Ethereum has stopped growing, so there is no longer any inflation, but the supply is falling, causing deflation.

“On November 10, 2021, the Ethereum price hit an all-time high of $4,869. However, a lot has changed since then, including the introduction of EIP-1559’s burning mechanism. Without EIP-1559, there would be $5.4 billion in additional Ethereum in the market right now,” said Pechman.

Bitcoin is currently trading about 59 percent from its all-time high of $69,000. That doesn’t mean Ethereum should be any closer, but it shows how cheap Ether is currently compared to Bitcoin, according to Pechman. In particular, the fact that Ethereum is currently deflationary speaks for the future of the asset, according to the analyst.

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