Fidelity Bullish on Ethereum in New Report, Says ETH Trading at Discount

The crypto arm of institutional giant Fidelity, with $4.5 trillion in assets under management, claims ETH is now in the "sweet spot" to buy in its new Ethereum Investment Thesis research report. According to the player, using a discounted cash flow model, the price should be $2,090 based on the current 120 million tokens in circulation and estimated annual fees of $6.8 billion.

The fund believes there is a correlation between activity on the blockchain, fees paid, and the cryptocurrency's value. Fidelity projects fees could reach $20 billion by 2030 as Ethereum usage grows. However, the report also cautions risks could undermine this outlook if fee income declines due to scaling, although increased volumes could offset declining margins.

"The relationship between ether and the value it provides to network users may weaken if scaling technology erodes fee revenue unless volumes increase and offset this margin compression," the report states.