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AAVE▲$87.37 price could climb to $175 within a year as Aave turns lending revenue and tokenized assets into token value, Grayscale says.
The price of AAVE could potentially soar more than two times over within the coming year on the back of regulatory clarity and tokenized assets boosting Aave‘s lending business, Grayscale analysts predict.
In a June 16 report, Grayscale’s Charlie Perkins and Zach Pandl said AAVE has value around current levels after a difficult stretch marked by deposit flight and the departure of some key contributors.
Grayscale used a spot price of about $75 in its model and in its base case, AAVE’s fair value should be at $175 within one year, implying about 133% upside from that level.
Read also: Aave Labs Gets UK Approval for Stablecoin Payment Units
- Aave Revenue Drives the Price Case
- But Buyback Pause Leaves a Caveat
Aave Revenue Drives the Price Case
As per the analysts, Aave’s earnings in 2026 could stand at $60 million, considering 20x to 25x valuation multiples which could take fair-value market capitalization to around $1.5 billion.
That near-term valuation is below the stronger one-year case as Grayscale says clearer crypto rules could help tokenized assets move into DeFi lending and push AAVE higher. Perkins and Pandl wrote:
“In a base case scenario in which regulatory clarity accelerates adoption of tokenized assets, we believe AAVE token fair value could rise to ~$175 in one year.”
If Aave earnings compound at 25% annually, the report says the implied AAVE price would be $227, while at 35% growth, it would even reach $444.
But Buyback Pause Leaves a Caveat
Nonetheless, what will matter here is how Aave governance continues to funnel protocol economics in favor of token holders through buybacks and treasury strategy because this is an incomplete story, the analysts pointed out.
Grayscale notes that Aave’s buybacks are paused after the Kelp DAO exploit caused downstream market disruption.
On top of that, the analysts pointed out that DeFi tokens can’t be valued on revenue alone because token holders don’t automatically own a legal claim on protocol cash flows.
Source: <a href="https://bitcoinfoundation.org/news/defi/aave-price-could-more-than-double-within-a-year-grayscale-says/” target=”_blank” rel=”nofollow noopener”>bitcoinfoundation.org