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An “undervalued”\u00a0Ethereum <\/strong>ETH\/USD<\/span> could close the valuation gap as the Merge approaches, Bloomberg analysts have said.<\/p>\n What Happened: <\/strong>In a recent Crypto Outlook report from Bloomberg Intelligence, analysts applied a discounted cash flow (DCF) model to the world\u2019s second-largest cryptocurrency.<\/p>\n \u201cThe upcoming Merge, shifting Ethereum from a proof-of-work model to proof-of-stake, will convert Ether into an equity-like instrument with elegant supply\/demand dynamics that could drive significant interest in the asset,\u201d they said, noting that the DCF analysis showed the cryptocurrency to be currently undervalued.<\/p>\n Modeling cash flows after transaction fees, analysts estimate that Ethereum is on track to generate $12.7 billion in 2022.<\/p>\n In the most optimistic scenario, the analysts arrived at a valuation of $9,328 for Ethereum, which represents an approximate\u00a0213% upside from current prices.<\/p>\n They applied a price\/earnings exit methodology when valuing the digital asset, with the assumption that Proof-of-Stake blockchains only have indirect costs in the form of new issuance, turning cash flows into profits.<\/p>\n They used an exit multiple of 25x \u2013\u2014similar to Apple Inc <\/strong>AAPL<\/span> \u2013 but noted that Ethereum \u201chas a much higher growth profile\u201d than the technology company.<\/p>\n See Also: Coinbase Expects Ethereum Staking Yields To Hit 12% APR After The Merge<\/a><\/em><\/p>\n Price Action: <\/strong>According to data from Benzinga Pro<\/a>, Ethereum was trading at $3,191, down 4.31% in the last 24 hours.<\/p>\n<\/div>\n