The current state of ETH and the inflow of funds is very similar to when mining stocks and MicroStrategy financed the purchase of BTC, pushing it to 100,000 USD. At that time, many people thought that over 100,000 was the peak of that cycle, and now it is already 120,000 USD.

Although BTC and ETH have great underlying assets and a grand future, let's not forget that last December, BTC dropped 14% within 4 days after reaching a peak of 108,000. Currently, ETH is also near a critical position at 4,000 USD, where there are a lot of trapped positions. Will the same script play out for ETH? A drop followed by a new high could leave many without positions. What's frustrating about this round is that ETH has only risen 10% this year despite the K-line showing a 150% increase over the past three months without much pause, but the fundamentals of Ethereum have not changed significantly during this period.

The reason for such a surge also comes from the liquidity premium and sentiment premium in the US stock market. There are too many companies in the US stock market looking to implement micro-strategies, and the liquidity is abundant. Last Friday, SBET had a daily trading volume of 12.6 billion USD, and for the company to cash out a few hundred million USD is quite easy; the liquidity is indeed excellent. Using the cash-out funds to buy ETH, a few hundred million USD could boost ETH's price gain and acquire a sentiment premium. During an uptrend, it will gain a stronger positive cycle, but will this really last forever? When will it stop? This is something we need to consider.

What is a reasonable analysis of how much ETH will rise?

How is ETH valued? The reference standard is the stablecoins running on ETH in the future *2, because according to the POS mechanism, controlling 51% of the nodes could potentially control the entire network. Currently, the scale of stablecoins on Ethereum is about 120 billion USD, compared to 70 billion USD last year, with a growth rate of 70%. Based on this, a valuation of over 400 billion USD for Ethereum seems quite reasonable. However, it is also necessary to consider the current valuation cap of ETH as a standard, and one shouldn't just think that the price of ETH should rise to 10,000 USD.

Since the biggest value of the ETH network comes from stablecoins, I will use the current market capitalization of payment leader Visa as the valuation ceiling, which is 658.7 billion dollars. If ETH and Visa had the same market capitalization, then its price should be $5452, which would indeed exceed the highest point of $4800 in 2021.