Ether is currently trading at approximately half its peak price, yet the Ethereum network holds a greater valuation than some of the world’s largest companies.
As of now, Ether (ETH) is priced around $2,088, a decline of over 57% from its all-time high of nearly $4,900 reached in mid-November 2021, according to market data.
Despite this drop, Ethereum boasts a market capitalization of nearly $252 billion, exceeding that of major global firms like Toyota ($250 billion) and the overall market value of platinum ($245 billion).
Other significant companies currently valued below Ethereum include IBM, McDonald’s, General Electric, Shell, and Disney. If Ethereum were classified as a corporation, it would rank as the fiftieth largest in the world, trailing just behind Nestlé, which has a market cap of close to $256 billion.
A research expert noted that the speculative interest plays a substantial role in Ethereum’s valuation, alongside its “freedom from traditional financial constraints.” He stated:
“Ethereum represents the future, showcasing new financial technologies and solutions. Being a relatively young project, it attracts many new and risk-taking investors. I believe that the average young investor will prefer Ethereum over shares in companies like Toyota or IBM.”
Another industry expert remarked that comparing Ethereum to traditional businesses is somewhat misleading. He clarified that “Ethereum isn’t a traditional company” — it’s more akin to infrastructure. He elaborated:
“Its worth isn’t just derived from profits but from its use and the belief in its future significance. It allows users to build, transact, issue assets, and coordinate without needing intermediaries.”
Furthermore, the first expert suggested that Ethereum’s transition to proof-of-stake (PoS) has added to its appeal, strengthening its position as a deflationary asset with potential for growth in the digital economy.
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Is Ethereum a deflationary asset?
Recent insights reveal that Ethereum has become inflationary again, showing an annual inflation rate of about 0.73% over the last 30 days.
The inflation or deflation rate is primarily influenced by the ETH fees burned on the network and the volume of newly issued Ether. Since the introduction of an upgrade in 2021, fees have been burned within the network. This, combined with reduced issuance post-PoS transition, resulted in Ethereum being deflationary during prolonged network activity.
Data indicates that on March 23, daily fees on Ethereum plummeted to just over $337,000, marking the lowest figure since June 2020. Additional reports have confirmed that on the same date, only 118.67 ETH worth of fees were generated, the lowest this year.
Ethereum network transaction fees per day. Source: YCharts
In the past 24 hours, ETH’s value has seen an increase of nearly 3.5%, boosting its market capitalization by around $9.3 billion to approximately $252.1 billion. For context, this figure is greater than Greece’s gross domestic product (GDP), which is roughly $243.5 billion.
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The research expert noted that beyond exceeding Greece’s GDP, Ethereum’s market cap is also greater than the combined GDPs of Slovenia and Croatia. He emphasized that this information is noteworthy:
“For institutional investors, this indicates legitimacy. Ethereum is recognized for its smart contracts, and Decentralized Finance (DeFi) has a total value locked of over $124 billion, showcasing it as not merely speculative but as future infrastructure.”
The CEO of an enterprise security firm conveyed that these figures reflect “a fundamental shift in the valuation of digital infrastructure”:
“We are increasingly acknowledging that substantial aspects of the global economy will eventually transition to this infrastructure. Ethereum’s market capitalization is fundamentally reflecting its anticipated role as the foundational layer for everything from financial services to supply chain management.”
The Ethereum protocol continues to advance as developers roll out innovations, such as native rollups, further enhancing the blockchain’s capabilities and potential applications.
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