Institutions pile in as ethereum valuation models signal major upside potential

Amid renewed institutional demand, Ethereum valuation metrics from multiple models point to a significant disconnect between ETH’s price and its estimated fair value.

Why do current models suggest Ethereum is undervalued?

CryptoQuant CEO Ki Young Ju said that Ethereum appears undervalued in 10 of the 12 valuation models tracked by analytics platform ETHVal. According to Ju, these frameworks were designed by trusted experts in academia and traditional finance, aiming to estimate the network’s intrinsic value with diverse methodologies.

Most of these valuation tools place ETH above $4,000, well above its spot level. Moreover, ETHVal’s composite fair value, calculated from all 12 models, currently stands at approximately $4,535.1. That figure implies potential upside of around 60% from the prevailing market price if the aggregate estimate proves accurate.

The models are ranked on a three-tier reliability scale, with level three considered the most robust and level one the least reliable. However, Ju stressed that the suite as a whole reflects cross-disciplinary research rather than speculative price targets.

How high could ETH go according to Metcalfe’s law?

Among the 12 models, Metcalfe’s law assigns the most aggressive upside. The approach, which states that a network’s value grows proportionally to the square of its number of active users or nodes, values ETH at a projected $9,534. According to the image shared by Ju on social media, that price would mean the asset is undervalued by more than 213%.

DCF staking yield ranked second, suggesting roughly 200% undervaluation and pricing ETH at $8,996.80. Moreover, the Validator Economics model valued Ethereum at $6,985.1, while the Settlement Layer framework followed with a valuation of $5,105.8. The Commitment Premium model put ETH at $5,068.90, still far above spot.

ETHVal shows that the blended output of these models forms a kind of informal ethereum valuation chart for long-term observers. That said, they remain theoretical constructs rather than guaranteed price paths.

What do other intrinsic value models say about ETH?

The App Capital model, which incorporates total on-chain assets such as stablecoins, ERC-20 tokens, non-fungible tokens (NFTs), real-world tokenized assets (RWAs), and bridged assets, priced ETH at $4,920.5. In addition, the L2 Ecosystem model and the TVL Multiple approach produced valuations of $4,716.1 and $4,110.5, respectively.

Two models, MC/TVL Fair and Staking Scarcity, delivered the lowest valuations that still sat above the market. They valued ETH at $3,523.3 and $3,496.5, respectively, implying more modest upside than Metcalfe-based scenarios. However, both still suggest a discount to underlying fundamentals compared with the current spot quote.

By contrast, two frameworks signal overvaluation. The Revenue Yield model, which values ETH based on yearly network revenue divided by staking yield, priced the asset at $1,433.8. Furthermore, the P/S Ratio (25X) model gave the lowest figure on ETHVal, at just $923.4, underscoring how different lenses on eth price models can diverge sharply.

How does the market price compare to ETH’s fair value estimates?

At the time of the analysis, Ethereum was trading at $2,828, down 5% in the previous 24 hours. Despite last week’s renewed institutional interest, that level remains well below the composite fair value of $4,535.1 derived from ETHVal’s 12 models, reinforcing what some analysts frame as an ethereum fair value gap.

Short-term traders have therefore seen price weakness even as fundamentals-based models point higher. Moreover, the 60% potential gain implied by the composite estimate highlights a growing disconnect between on-chain metrics and spot pricing.

According to Ju, the goal is not to pinpoint a precise top but to show how different methodologies converge or diverge around perceived worth. However, market participants still need to weigh macro conditions, regulation and risk appetite alongside any single framework.

Are institutional flows aligning with this ethereum valuation gap?

On the institutional side, data from SoSoValue shows that U.S. spot Ethereum ETFs recorded inflows of $76.55 million on Friday. That marked a five-day streak of positive flows and, notably, exceeded the $71.37 million net inflows seen in U.S. spot Bitcoin ETFs on the same day. This shift has sparked fresh eth market analysis among professional investors.

The influx came even as ETH’s price slipped 5% in 24 hours, according to CoinMarketCap. Moreover, it followed reports that ETH futures trading is expanding faster than that of Bitcoin and Solana, signaling growing derivatives interest around the asset.

Another recent publication noted that ETH is trading close to a fair value range when evaluated through futures positioning and exchange reserves. However, the same report highlighted that exchange reserves of Ethereum are at an all-time low, suggesting a limited immediate supply ready for spot selling.

What does this mean for long-term ETH investors?

For long-term holders, the current backdrop combines a 5% daily price drop with strengthening institutional inflows and largely supportive model-based estimates. The tension between derivatives expansion, low exchange reserves and discounted pricing suggests a complex but potentially constructive setup.

That said, valuation frameworks can remain misaligned with market prices for extended periods. Investors typically view tools like the Ethereum TVL multiple and revenue-based models as guides rather than precise timing signals, integrating them with macro analysis and risk management.

In summary, most ETHVal models, institutional ETF flows and on-chain supply dynamics point to a market that may not fully reflect Ethereum’s underlying network activity, even as short-term volatility continues to shape trading conditions.