What happened
CoinShares released a five-year valuation framework for Ethereum on Tuesday, authored by Luke Nolan, the firm's senior research associate for Ethereum. The report carries three headline outputs by 2031: a bear case of $1,443, a base case of $4,935 and a bull case of $14,135. From the $1,870 spot level at press time, those translate to annualized returns of -9%, 16% and 43% respectively.
The firm announced the work on X on June 2, framing it as a response to a specific problem: Ethereum has become harder to value after Dencun. The upgrade pushed execution activity to layer-2 networks, cratered base-layer fee revenue and weakened the "ultrasound money" narrative that had supported earlier ETH valuations. Weekly fees that peaked above $200 million in early 2024 now run closer to $10 million, per the report, even as monthly active users have roughly doubled.
The model splits ETH's value into two main legs: a cash-flow valuation treating Ethereum like a blockspace business, and a monetary premium valuation treating ETH as the collateral and reserve asset of its own ecosystem. A third overlay captures network effects and speculative demand.
Why it matters
This is one of the first major sell-side style frameworks to formally downgrade fee revenue as the primary driver of ETH price. CoinShares' cash-flow leg contributes just $25 in the bear case, $385 in the base case and $2,055 in the bull case to the 2031 price target. The monetary premium leg does the heavy lifting at $1,774, $3,960 and $10,065 respectively.