Cryptocurrency analyst Fred Krueger has expressed concerns over the inflated valuation of Ethereum (ETH), arguing it does not match its actual usage capabilities.
Analysis of Ethereum's Valuation
In his post on the X platform, Krueger stated that the current value of ETH is disproportionate to its actual usage potential. He remarked, 'Let's assume all Visa and Mastercard transactions switched to stablecoins on Ethereum. 393 billion payments per year x average $0.03 rollup fee = $11.8 billion in fees. The direct share of ETH (burn) would be approximately $1.8 billion, while layer 2 sequencers would earn approximately $10 billion.'
Comparison with Other Technologies
Krueger emphasized that the current ETH market cap of approximately $575 billion equates to a 320x fee ratio compared to these revenue figures. He noted that this multiple is excessive compared to tech giants such as Apple (~30x profit) and Google (~25× earnings).
Views on Ethereum's Future
He also referred to ETH bull analyst Tom Lee, stating that even in a fantasy world where every Visa and Mastercard transaction was processed on Ethereum, ETH would still be overvalued. Krueger commented, 'Tom Lee would get richer, and you would get poorer.'
Krueger's conclusions raise significant questions about Ethereum's future prospects and its actual value amidst growing expectations in the cryptocurrency space.
