Coin Bureau Sees Ethereum Soaring to $20K and Disrupting Banking
According to Coin Bureau Ethereum has the potential to soar past $20K with the help of an emerging sector of the crypto markets.
In a recent video, the widely-followed analyst known as Guy tells his 1.13 million YouTube subscribers that decentralized finance (DeFi) and its ability to replicate the services of traditional finance without the drawbacks will be the catalyst that pushes Ethereum to the stratosphere.
According to Guy traditional finance is “completely replaceable”:
“Unsurprisingly, the banks have been performing pretty poorly over the past decade. From the US banks, to those of China, Japan and Europe, an abysmal performance from a once-towering industry. Just try to picture that: this is the sector that caused the 2008 financial crash. They have honed the craft of privatizing gains and socializing losses. However, despite this, they have still been unable to capture any value for their shareholders…..
So the question then becomes: what services are these banks providing and can they be replicated in DeFi?”
Guy refers to an essay penned in April by Arthur Hayes, the former chief executive of the derivatives exchange BitMEX.
The essay explains how ‘Decentralized Finance’ can easily replicate savings accounts, checking accounts and trust services. However, while DeFi can offer loans, the sector is heavily over-collateralized, meaning that banks tend to do a better job with loans despite their shortcomings.
According to Hayes, if Ethereum can capture some percentage of the five-year average earnings of banks and the big four audit firms, it would soar in value.
Hayes’ calculations point out, if the Ethereum ecosystem managed to capture 0.5% of traditional finance’s revenue, it would 10x ETH in value to more than $20,000. If it manages to reach 5% of traditional finance’s revenue the valuation would be $200,000.
Guy further points out that capturing 0.5% of traditional finance’s revenue is a reasonable expectation for DeFi:
“This realization is the reason that institutional investors are lapping it up. This realization is the reason that Goldman has dived right into [Ethereum] options before offering them on Bitcoin. Now, of course, a lot of it does hinge on the upcoming updates. Pushing forward such fundamental upgrades won’t be an easy feat on a network worth over $300 billion dollars. But they are necessary.”
Ethereum is currently trading at $2,173 according to CoinMarketCap.
