CoinShares has published a five-year valuation framework for Ethereum that reframes how to value ETH after the Dencun upgrade — and the results are wide-ranging.
The report, authored by Luke Nolan, CoinShares’ senior research associate for Ethereum, uses a sum-of-parts model that splits ETH’s value into three components: cash-flow from blockspace fees, a monetary/collateral premium tied to ETH’s role inside the ecosystem, and a network/speculative overlay. The headline outputs by 2031 are a bear case of roughly $1,443, a base case of $4,935, and a bull case of $14,135 — implying annualized returns of about -9%, 16% and 43% from current spot levels (ETH traded around $1,870 at publication).
Why the new approach? Dencun changed the economics. Execution activity has migrated toward layer-2s, lowering user costs and boosting throughput, but fee revenue has collapsed: weekly fees that topped $200 million in early 2024 now run near $10 million even as monthly active users have roughly doubled. That shift, CoinShares argues, reduces the case for valuing ETH primarily on base-layer fee cash flows and makes its monetary, collateral and settlement roles far more important.
How the model breaks down
- Cash-flow (blockspace) valuation: Treats Ethereum like a business selling blockspace across DEX trading, stablecoin transfers, DeFi, blob transactions, ETH transfers, RWA settlement, staking ops and an “other” bucket. Contribution to the 2031 price is modest: $25 (bear), $385 (base), $2,055 (bull).
- Monetary/collateral valuation: Treats ETH as the monetary and collateral base for staking, DeFi collateral, layer-2 reserves, ETF inflows, corporate treasuries and store-of-value demand. This component dominates the model: $1,774 (bear), $3,960 (base), $10,065 (bull).
- Network/speculative overlay: An additional layer capturing market structure and speculative dynamics is applied on top of the other two pieces.
What the scenarios assume
Bull case (highly demanding): fee revenue of $5.7 billion by 2031, DEX volume CAGR of 25%, Ethereum L1 market share rising to 35%, stablecoins on Ethereum growing to $2.8 trillion at a 50% CAGR, tokenized real-world assets on Ethereum at $420 billion, annual ETF inflows of $40 billion, $25 billion in corporate buying, plus a 3x “regime multiplier” to reflect a market with fewer willing sellers and stronger price discovery. CoinShares calls this an “everything goes right” scenario.
Base case (constructive): Ethereum remains the dominant smart-contract platform, DEX volumes grow at 17% CAGR, L1 DEX share holds at 20%, stablecoin supply on Ethereum reaches about $450 billion by 2031, and DeFi TVL compounds at 25% — producing the $4,935 implied price (roughly 110% upside over five years).
Probability and requirements
CoinShares sees the highest probability lying between the base and bull cases. To hit the base case, Ethereum doesn’t need to win every category, but it must retain DEX share and its stablecoin position, deliver planned scaling upgrades (the report cites Glamsterdam among others), and see ETH ETF flows move closer to bitcoin-adjusted levels.
Key risks
The firm flags several variables that could force the model to be revised: persistently weak fee economics post-Dencun, unclear blob mechanics, pressure from competing layer-1s, regulatory headwinds, shifts in macro monetary policy, and delays to critical scaling milestones.
Bottom line
CoinShares’ framework shifts the valuation conversation from fees toward ETH’s monetary and collateral roles inside an expanding Ethereum economy. Depending on which assumptions play out, ETH’s 2031 price could range from the low thousands to well above $10,000 — but the path there hinges on scaling success, demand for on-chain money and collateral, ETF and corporate flows, and how the post-Dencun economics evolve.
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