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Grayscale Says AAVE Is Undervalued, Sees $179 Target Within a Year

Grayscale sees AAVE as undervalued and expects strong growth from stablecoin revenue and institutional adoption. Its 12-month price target is $179.11.

By Zenz van der Wielen
• 2 min read
Grayscale Says AAVE Is Undervalued, Sees $179 Target Within a Year

Key Takeaways

  • Grayscale Research calls AAVE undervalued and estimates fair value between $80 and $100, versus a price around $77.
  • Grayscale’s base price target for AAVE is $179.11 within 12 months, with a bull case of $270.57.
  • Grayscale sees growth from stablecoin revenue, institutional adoption, and Aave’s V4 upgrade.

Grayscale Research recently published an analysis saying Aave’s AAVE token is undervalued. Based on a discounted cash flow analysis, the firm estimates AAVE’s fair value at between $80 (€69) and $100 (€86), while the current market price is around $77 (€66). That points to possible upside, with Grayscale’s base price target coming in at $179.11 (€154).

Analysis and Growth Drivers According to Grayscale

Grayscale’s report highlights Aave as a permissionless on-chain bank that generates recurring revenue. According to its estimates, the protocol will bring in about $60 million (€51.8 million) in revenue in 2026. One key point is that more and more of that revenue is being driven by stablecoins instead of volatile crypto assets, which creates a steadier and more sustainable revenue base as the protocol grows.

By applying fintech multiples of 20 to 25, Grayscale arrives at a market value between $1.2 (€1) and $1.5 billion (€1.3 billion), which implies an AAVE price of $80 (€69) to $100 (€86). Grayscale also laid out three scenarios for the next 12 months: a bear case of $90.91 (€78), a base case of $179.11 (€154), and a bull case of $270.57 (€233).

The base case rests on five assumptions: exponential growth in stablecoin activity, major partnerships within the Horizon ecosystem, the return of previously withdrawn deposits, bringing in mainstream users through the Aave App, and institutional adoption that deepens liquidity and helps the protocol keep evolving.

AAVE's Current Position and Market Context

At the time of writing, AAVE is trading around $77.23 (€67) with a market cap of about $1.17 billion (€1 billion), just below the lower end of Grayscale’s valuation range. That means the base price target implies a potential return of about 132%.

Even after a recent exploit in April at Kelp DAO that hit Aave hard and led to a drop in total deposits, Grayscale says the transparent and professional way the situation was handled strengthened Aave’s institutional credibility. That fits into a broader trend, where DeFi leverage reaches 2021 levels after exploit-driven TVL drop shows how security incidents keep affecting liquidity and risk sentiment in DeFi.

Aave also launched its V4 upgrade in March 2026 with a hub-and-spoke design aimed at improving capital efficiency and reducing liquidity fragmentation. That is an important technical step that could further strengthen Aave’s position in the on-chain lending market.

Why This Matters for European Crypto Investors

For European investors, AAVE’s valuation and growth potential could be interesting, especially with stablecoin adoption rising and advanced DeFi protocols like Aave continuing to develop. The recent upgrades and institutional interest may point to a stronger market position, which matters for investors looking at DeFi assets in a crypto market that is growing and becoming more professional.

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