Arthur Hayes’ Crystal Ball Predicts: Ethereum To 5 Digits
April 01 2022 - 6:00PM
NEWSBTC
Former BitMEX CEO Arthur Hayes published a prediction for Ethereum.
In a post titled “Five Ducking Digits”, Hayes makes the bullish
case for the second cryptocurrency in terms of market cap. Related
Reading | Ethereum Bullish Signal: 1.2 Million ETH Exited Exchanges
Recently At the time of writing, Ethereum trades at $3,400 with a
5% profit in the last 24 hours. As NewsBTC reported, Hayes believes
the current financial system began a new phase as a consequence of
the war between Russia and Ukraine. The international community
imposed sanctions on the former country as a response. Russia has
been cut off from the international financial system, its social
elite has been punished, and its gold reserves seized. The Vladimir
Putin-led country and other superpowers, Hayes argued in his
thesis, will push to dethrone the U.S. dollars as a global reserve
currency. This will lead to higher Gold and Bitcoin prices as
people will flee to stores of value, and neutral monetary systems.
Hayes’ latest post follows this idea of the global financial crisis
that will benefit cryptocurrencies. Hayes Prediction On Ethereum,
Why The Financial Sector Will Embrace It The former BitMEX argued
that Ethereum will see appreciation on the back of two main
factors. First, the full deployment of ETH 2.0 capabilities with
“The Merge”. This event will join Ethereum’s execution layer or ETH
1.0 with its consensus layer or ETH 2.0, the Proof-of-Stake
blockchain. Set to reduce ETH’s network energy consumption by 99%,
it’ll provide the digital asset with a strong narrative: it’ll
become ESG-compliant. In other words, institutions will be able to
trade and create investment products based on the cryptocurrency
without facing backlash based on its consensus algorithm. When
Tesla invested in Bitcoin, the company’s CEO, Elon Musk, had to
stop accepting it as a form of payment. The first crypto is
considered a threat to the environment by its detractors. Post
Merge, Ethereum will provide its node validators with rewards for
staking ETH and securing the network. This will create another
narrative, Ethereum could be deemed a bond for the benefit of the
“financial advisors”, for the elite in the financial sector. Thus,
it could see greater adoption. Hayes explained: (…) paired with ETH
2.0’s ESG-compliant label (another stamp of intellectual
ossification), and protocol metrics that are more attractive than
the cadre of layer-1 (L1) “Ethereum killers” makes ETH supremely
undervalued on a relative basis vs. Bitcoin, fiat, and other L1
competitors. ETH Holders Will Be The Biggest Winners “The Merge”
will provide stakers, according to data provided by Hayes, with an
initial 8% to 11.5% Annual Percentage Rate (APR). As an asset
operating like a bond ETH will present new investment
opportunities. A bond is a form of debt created between two
parties, a company, government, or in this case the Ethereum
network. Beyond a simple price prediction, Hayes invited traders to
consider this new possibility as ETH prepares for its upcoming
“Merge”. He said: If you believe that ETH can or should be valued
as a bond, then as an investor – given your long-term interest rate
and ETH reward assumptions – you should be willing to buy ETH at
today’s prices (…) This trading opportunity, along with the full
deployment of its PoS capabilities will attract fresh capital.
Money from “ESG-friendly” investors looking for crypto exposure,
but unable to obtain as long as PoW is the dominant consensus
algorithm. Hayes added: Sentiment will all change when ETH becomes
an ESG-friendly, POS blockchain, which ESG funds can then invest
in. This opens up ETH to hundreds of billions of USD worth of
fiduciaries who due to ETH’s classification, can now safely invest
(…). Related Reading | TA: Ethereum Trims Gains, $3,200 Is The Key
In the coming months, Hayes believes ETH will outperform in the
layer-1 sector. This event could take market share from the “ETH
Killers”, such as Cardano, Terra, Avalanche, Solana, and Polkadot.
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