A strategist from Bloomberg says that PayPal’s launch of its own stablecoin hasn’t been priced into markets yet, and should have a significantly positive effect on Ethereum (ETH).
Jamie Coutts, a crypto market analyst at Bloomberg Intelligence, says that market participants are discounting the fact that PayPal’s network is hundreds of times larger than Ethereum’s.
Since PYUSD, PayPal’s new stablecoin, is an ERC-20 token, Coutts says that even a small amount of PayPal users converting to PYUSD will have a massive effect on Ethereum.
“The Paypal announcement is not priced in.
Paypal has 435 million active accounts vs Ethereum L1/L2 Active Addresses: 1 million.
If 1% covert a dollar balance to PYUSD (4.35 million) and begin to use it, then the ramifications for the Ethereum ecosystem and ETH, the asset, are massive.”
Taking a closer look at Ethereum, Coutts also says that the leading smart contract platform could be undervalued when considering the large growth in fee revenue compared to a rather modest increase in price. He says such a divergence preceded the bull run of 2020.
“2023 fees have climbed 176% vs. the price, up 53%. The relationship between the two was instructive for the last bull market when fees outpaced prices in 2020 after a two-year decline…
This is very a strong performance from the leading L1 outperforming our expectations on the erosion of fee income from L2 expansion. Ethereum’s moat is deepening and widening.”
At time of writing, Ethereum is worth $1,839.
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