Valuing Ethereum

Since launching in 2015, Ethereum has garnered significant interest as the second largest blockchain network. But even as the network has matured into a robust settlement layer for billions of dollars of peer-to-peer value transfer, investors often find it difficult to identify the investment case.

With the growing activity on Ethereum, investors wonder about the investment case and how to value the native asset of the Ethereum network, Ether. In August, we released a report on Valuing Bitcoin to help investors understand the Bitcoin investment case and how they can monitor important underlying metrics. Similarly, the goal of this paper is to outline important considerations for valuing Ether. But while Bitcoin is widely known as digital gold, Ether’s designation is less clear. We explore three approaches and relevant metrics associated with each: Ether as money, Ether as a consumable commodity, and Ether as an interest-bearing asset.