Despite ETH price drop, Ethereum network market cap surpasses Toyota and platinum

Ether (ETH) traded at roughly $2,088 at the time of writing amid continued exchange-traded fund (ETF) outflows, down over 57%

Ether (ETH) is trading at around half its all-time high price, but the Ethereum network is still valued higher than some of the world’s most prominent companies.

Ether (ETH) traded at roughly $2,088 at the time of writing amid continued exchange-traded fund (ETF) outflows, down over 57% from its all-time high of nearly $4,900 set in mid-November 2021, according to CoinMarketCap data.

Despite this decline, Ethereum maintains a market capitalization of nearly $252 billion, surpassing global corporations such as Toyota with a market cap of $250 billion and the total market value of the precious metal platinum, which is $245 billion.

Other notable companies currently worth less than the Ethereum network include IBM, McDonald’s, General Electric, Shell and Disney. If Ethereum were a company, it would be the fiftieth largest in the world, just behind Nestlé, which has a market capitalization of nearly $256 billion.

Alex Obchakevich, founder of Obchakevich Research, told Cointelegraph that speculative interest significantly contributes to Ethereum’s valuation, as well as its “freedom from the financial framework of traditional finance.” He added:

“It’s no secret that in the crypto sphere, a significant portion of the activity stems from speculation, especially in the case of a decentralized and open network like Ethereum, which is not subject to the same regulations and oversight as traditional financial institutions or companies.”

However, Flavio Bianchi, a Polkadot ambassador and the chief marketing officer of the decentralized fundraising platform Polimec, told Cointelegraph that the comparison is less insightful than it might appear at first. He highlighted that “Ethereum isn’t a business” — it’s infrastructure.

“It’s like comparing apples and oranges. Companies are valued based on their earnings, revenue and tangible assets, while a blockchain network is valued based on the total value of its native token, which is determined by market demand and supply, which in turn depends on the network activity and usage.”

Obchakevich also suggested Ethereum became more attractive after it transitioned to proof-of-stake (PoS), reinforcing “its value as a deflationary asset with growth potential in the digital economy.”

Is Ethereum a deflationary asset?

Recent data from Ultra Sound Money shows that Ethereum is now displaying inflation again, with an annual inflation rate of about 0.73% over the past 30 days.

The rate of inflation or deflation is largely dependent on the ETH fees burned by the network and the amount of newly issued Ether. The burning of fees on the network began with the implementation of EIP-1559 in 2021, which, paired with decreased issuance after the PoS transition, resulted in Ethereum being deflationary during sustained network activity.

According to IntoTheBlock data, on March 23, daily fees on Ethereum fell to a little over $337,000, the lowest value reported since June 2020. YCharts also shows that on March 23, there was only 118.67 ETH worth of fees, the lowest value reported this year.

Over the past 24 hours, ETH’s value rose nearly 3.5%, increasing its market capitalization by about $9.3 billion, now totaling approximately $252.1 billion. For comparison, this figure exceeds Greece’s gross domestic product (GDP), currently around $243.5 billion.

Obchakevich highlighted that other than being worth more than Greece’s GDP, Ethereum’s market cap is also higher than the GDP of countries such as Slovenia and Croatia combined. And this is more than a curious factoid:

“It speaks volumes about the potential and value that is being recognized in the decentralized space, in contrast to the traditional financial institutions and companies that are floundering despite having far greater resources at their disposal.”

Pradeep Singh, CEO of enterprise privacy and security infrastructure firm Gateway FM, told Cointelegraph that these numbers reflect “a fundamental shift in how we value digital infrastructure”:

“As we move towards a more decentralized web3 future, we're seeing that the lines between company valuation and network valuation are blurring. Ultimately, both are determined by market demand and the perceived value of the product or service being offered.”

The Ethereum protocol continues to evolve as developers introduce innovations such as native rollups, further expanding the blockchain’s capabilities and potential use cases.