David Grider, the top digital strategist at FUNDSTRAT, joined Yahoo Finance Live to break Ethereum, reaching a new historical record and what it means for other cryptocurrencies going forward.
Video transcription
ZACK GUZMAN: Great technology has been a major driver for many funds that have seen some recent gains, as well as cryptocurrencies. And we focus a lot here on Bitcoin, the biggest cryptocurrency. But in this segment, I want to focus on the second largest cryptocurrency in Ether, with that currency recently hitting historic records briefly on some yesterday’s exchanges. Fundstrat strategists issuing a new note here that could be on track for a 650% increase to reach prices above the $ 10,000 level here.
I want to bring our next guest to focus on that call, the man behind it, David Grider, Fundstrat’s leading digital strategist, joins us now. And David, I mean, this is the target price here at Ether. But you point out some real numbers here to support you. It is clear that many of the Bitcoin bulls out there have focused on the flows of funds from institutional investors, proclaiming Bitcoin as digital gold. But when you look at Ether, talk to me about how you back up a price target above $ 10,000.
DAVID GRIDER: Yes, first, thanks for having me. You know, as your program listeners will know, Fundstrat, we’ve been optimistic about cryptography, Bitcoin and Ethereum, for quite some time. And we think that if we look at cryptography and things like Ethereum platforms like that, we really think that it’s a new type of Internet technology company. But these things are organized like networks.
And the way we look at Ethereum is, we see it almost as, in fact, a crypto cloud stock. And we think that things like Ethereum, you know, can really be the next wave of potentially cloud computing. And I know it’s a crazy statement to make. But if we look at the data and think, well, this is what is really important. So you look at the data from Ethereum last year. This thing is generating material revenue, I mean, throwing away, you know, about $ 600 million in 2020, set to, at the rate so far, in 2020, grow to really could reach $ 4 billion.
So, if we look at the growth it has been doing over the past five years, I mean, it has grown over 1,000%. And we think that this is really showing no signs of stopping, based on this DeFi movement, which I can talk about a little. But we think that makes Ethereum really look like an Ant Financial to us.
ZACK GUZMAN: Yes, very fast. I mean, we only have about a minute here. But you mentioned DeFi, and that’s the kind of thing that has triggered a lot of it, these apps being built. Perhaps people who are new to cryptography here, Ethereum being a blockchain on which many of these apps are building, rather than Bitcoin. So, how do you see this movement perhaps happening here that would direct what you are talking about, this adoption and increase in the price of Ether.
DAVID GRIDER: Yes, as I mentioned, I think of Ethereum as something decentralized and financial. This DeFi movement is actually called Decentralized Finance. There are actually $ 29 billion today or $ 25 billion in assets being used in this network for things like foreign loans, payments, asset management, all automated through software.
And these things are generating a ton of fees, and it’s been growing very fast, going from a billion, just at the beginning of the year. We think this should continue. And revenue growth continues at this pace. We look at this and evaluate it as a cloud stock against the cloud index based on a growth-adjusted basis. That’s how we got to our number.
ZACK GUZMAN: Yes, I mean, it’s exciting to finally see some numbers here supporting these price targets. But without a doubt, hot to start 2021. David Grider, Fundstrat’s leading digital strategist, thank you for joining us in this.