Uniswap represents a breakthrough in the crypto markets, being one of the catalysts of the DEFI revolution. It has done great until now, but can Uniswap reach $1000 at some point in the future?
Uniswap can reach $1000 because of its huge volume and revenue. If it reaches the same ratio between market cap and revenue that Coinbase has, it will reach $166 in 2021. If the revenue continues to increase at an exponential rate, the price of Uniswap could propel up to $1663 in 2022.
Let’s get into how and why Uniswap can reach $1000, and how realistic it is:
Is It Realistic That Uniswap Reaches $1000?
Uniswap is a decentralized exchange where you can swap ERC-20 (Ethereum based) tokens.
The way to valuate a project like this is to look at it’s number of users and the revenue produced (fees paid).
On Uniswap, the fees you pay for swapping tokens is 0.3%. This means that Uniswap produces a revenue of 0.3% of the total volume (amount of swapped value).
Below you see a chart showing the weekly volume on Uniswap back to the first week of 2021, with a projected trendline for the rest of 2021:
The trendline reaches 27.5 Billion USD per week. This means that if the growth we’ve seen in the first 18 weeks continues at the same pace for the next 34 weeks, the volume (swapped value) on Uniswap will reach 27.5 Billion USD.
The revenue will then be 0.3% of that:
0.003 * $27 500 000 000 = $82 500 000 (82.5 Million USD)
Remember, that’s the WEEKLY revenue.
To get a valuation on Uniswap, we can compare it to Coinbase in terms of revenue and market cap:
The chart above shows the market cap of Coinbase and Uniswap compared to their revenue in Q1.
Let’s calculate the ratio between the market cap and revenue of Coinbase, and apply this ratio to Uniswap:
|Revenue (Million USD)||Market cap (Million USD)||Market cap / Revenue Ratio|
If we apply the same ratio between market cap and revenue that Coinbase has to Uniswap, the market cap would be:
Market cap = $394 800 000 * 44.1 = $17 410 680 000
In other words:
If Uniswap reaches the same ratio between market cap and revenue that Coinbase has, Uniswap will have a market cap of $17.4 Billion.
The price per coin can be calculated by dividing the market cap by the number of coins in circulation.
According to coinmarketcap, the supply of UNI is at 523 384 244. This means that the price per coin can be calculated like this:
$17 410 680 000 / 523 384 244 = $33.2
If Uniswap reaches a Market cap / Revenue ratio like Coinbase, the market cap would fall to 174 billion USD, and the price per coin would fall down to 33.2 USD.
As we can see, with the revenue of 3.95 billion USD Q1, the price can’t reach anything even close to $1000.
However, this is with the current revenue. Let’s have some fun, and look at what happens when the revenue increases:
Can Uniswap Reach $1000 With Increased Revenue?
With the current numbers, Uniswap should be priced at 33.2 bucks per coin. To reach $1000 the price, and therefore the revenue needs to 30x.
Therefore, the right question to ask is this:
Will Uniswaps’ revenue 30x?
Well, as we saw on the chart above where we projected the volume for 2021, it’s actually possible.
Once again, here it is:
As you can see, the volume starts out at $6 billion, and reaches $27.5 billion. That almost a 5x.
Now, if the volume does a 5x, the revenue will also 5x.
If the revenue does a 5x, the potential market cap will 5x.
The conclusion is:
Uniswap is on the path to a 5x’ed revenue by the end of 2021. If Uniswap reaches a market cap / revenue ratio of 44.1 like Coinbase, we will see a market cap of $87.05 Billion and a price per coin of $166.
Now, if the crypto market continues to surge in 2022, we might expect a 10x in 2022 as well.
After all, DEFI is still only a fraction of it’s potential. It will without a doubt be adopted at an exponential rate.
If it 10x’es in 2022, the price would reach 1660 bucks, and the market cap would reach $870.5 Billion
Let’s take a look at the market cap of 870.5 billion compared to the current market cap of other coins, to get a more concrete idea of what it means:
We see that the market cap would be somewhere between the current market cap of Bitcoin and Ethereum, which seems like a realistic outcome.
Remember, the market cap of Bitcoin and Ethereum will also increase in the time it takes Uniswap to reach 870.5 billion USD.
According to historical data and models, Bitcoin will reach 1.87 Trillion, and Ethereum will reach just south of 1 Trillion USD.
This gives Uniswap plenty of “room to grow”, making a $1000 UNI highly realistic at some point in the future.
Conclusion: Yes, Uniswap Can Reach $1000
Yes, Uniswap can reach $1000 because of its huge volume and revenue. The projected revenue puts its price at $1000 in 2022.
If Uniswap has the same ratio between market cap and revenue, and 5x its volume in 2021, and 10x in 2022, it will reach a market cap of $870.5 Billion, and a price per UNI of $1663.
This would put its market cap between the current market cap of Bitcoin and Ethereum. However, as they will grow as well, Uniswap will be valued below both Bitcoin and Ethereum. This is good, as it makes it more realistic.
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