According to Coin Bureau analyst Guy, Ethereum (ETH) could hit $20,000 with the emerging cryptocurrency industry.
Guy thinks ETH has the potential to exceed $20,000. In a new video, the popular analyst says that decentralized finance (DeFi) and its ability to replicate traditional financial services without their drawbacks will be the catalyst that will push Ethereum up.
The analyst tells his 1.13 million YouTube subscribers that traditional finance is “completely replaceable.”
To answer this question, the analyst points to an article penned in April by Arthur Hayes, the former CEO of derivatives exchange BitMEX. In his article, Hayes explains how DeFi can easily copy savings accounts, checking accounts, and trust services. That said, while DeFi can offer loans, the industry is overly collateralized, meaning banks tend to do a better job with loans despite their shortcomings.
Hayes states that if Ethereum can capture a percentage of the average five-year earnings of banks and four major audit firms, its value will skyrocket. Based on Hayes’ equations, if the Ethereum ecosystem manages to capture 0.5% of traditional finance income, it would be worth 10x and would be worth more than $20,000. Capturing 5% of traditional finance’s revenue would send it to $200,000.
The analyst claims that capturing 0.5% of traditional finance revenue is a reasonable expectation for DeFi: