FUNDSTRAT Lead Digital Strategist David Grider joined Yahoo Finance Live to break down Ethereum hitting a new all-time high and what this means for other cryptocurrencies going forward.

Video Transcript

ZACK GUZMAN: Big tech has been a big driver for a lot of funds that saw some recent gains, as well as cryptocurrencies. And we focus a lot here on Bitcoin, the largest cryptocurrency. But in this segment, I want to focus in on the second largest cryptocurrency in Ether, with that coin recently hitting all-time highs briefly on some exchanges yesterday. Strategists at Fundstrat issuing in a new note here that it could be on pace for a 650% increase to hit prices above the $10,000 level here.

I want to bring on our next guest to focus in on that call, the man behind it, David Grider, Fundstrat lead digital strategist, joins us now. And David, I mean, that’s quite the price target here on Ether. But you point to some real numbers here to support it. Of course, a lot of the Bitcoin bulls out there have been focusing in on fund inflows from institutional investors, proclaiming Bitcoin to be digital gold. But when you look at Ether, talk to me about how you back up a price target above $10,000.

DAVID GRIDER: Yeah, first off, thanks for having me. You know, as your listeners to the show will know, Fundstrat, we’ve been bullish on crypto, Bitcoin and Ethereum, for some time. And we think that if we look at crypto and things like Ethereum platforms like that, we really think it’s a new type of internet technology company. But these things are organized as networks.

And the way we look at Ethereum is, we look at it almost as, really, a crypto cloud stock. And we think that things like Ethereum, you know, really could kind of be the next wave of potentially cloud computing. And I know it’s kind of a crazy statement to make. But if we look at the data and we think, well, that’s what’s really important. So you look at Ethereum’s data as of last year. This thing is doing material revenue, I mean throwing off, you know, roughly $600 million in 2020, set to, on pace so far in 2020, grow to really could be $4 billion.

So if we look at the growth that it’s been doing over the last five years, I mean, it’s been growing at over 1,000%. And we think that that is really showing no signs of stopping, based on this DeFi movement, which I can talk about in a bit. But we think that that makes Ethereum look like, really, an Ant Financial to us.

ZACK GUZMAN: Yeah, real quick. I mean, we only got about a minute left here. But you mentioned DeFi, and that is kind of the thing that has been triggering a lot of this, those applications being built. Maybe people who are new to crypto here, Ethereum being a blockchain that a lot of these applications are building on rather than Bitcoin. So how do you see that movement maybe playing out here that would drive what you’re talking about, this adoption and increase in the price of Ether.

DAVID GRIDER: Yeah, so as I mentioned, I think about Ethereum as kind of like decentralized and financial. This DeFi movement is really called Decentralized Finance. There’s really $29 billion today or $25 billion of assets being used in this network for things like foreign lending, payments, asset management, all automated through software.

And these things are generating a ton of fees, and it’s been growing very fast, up from a billion, just the beginning of the year. We think this is set to continue. And its revenue growth continues at this pace. We look at that and value it like a cloud stock versus the cloud index based on a growth adjusted basis. That’s how we get to our number.

ZACK GUZMAN: Yeah, I mean, it’s exciting to finally see some numbers here backing up these price targets. But no doubt, hot to start 2021. David Grider, Fundstrat lead digital strategist, appreciate you joining us on that.



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