VanEck Predict ETH Price Target of $22,000 Boosts Portfolio

In a recent study, VanEck Research analyzed the impact of including Ethereum (ETH) and Bitcoin (BTC) in traditional 60/40 investment portfolios from September 2015 to April 2024. The results show that including up to 6% of these cryptocurrencies in a portfolio increase its risk-adjusted return or Sharpe ratio while incurring minimal incremental drawdown.

Source: VanEck on X

The analysis also showed that 70% BTC and 30% ETH formed an ideal risk-adjusted return for a pure cryptocurrency portfolio. Additionally, VanEck raised its 2030 ETH price target to $22,000, influenced by anticipated spot ether ETF approvals, scaling progress, and on-chain data analysis.

Analysis suggests that the Ethereum network continues to gain market share from traditional financial institutions and Big Tech. This growth is driven by its strong appeal to entrepreneurs. If Ethereum maintains its dominant position among smart contract platforms, VanEck sees a credible path to $66 billion in free cash flow for token holders, supporting a $2.2 trillion asset, or $22,000 per currency, by 2030.

However, by incorporating the ideal crypto portfolio of 28.6% ETH and 71.4% BTC into a 60/40 portfolio, investors can increase returns with varying risks. As risk increased with each holding, risk-adjusted returns were found to follow an almost straight line, confirming that greater exposure to cryptocurrencies resulted in better returns.

The results provided an allocation of 5% ETH and 1% BTC. However, some of the risks that investors should consider in stocks include reliance on speculative information, the fact that regulation is still an issue for most cryptocurrencies, interest rate risks, competition risks, and geopolitical risks.

Read too: Gary Gensler on T+1 Settlement, AI and Crypto Regulation

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