Arthur Hayes, former CEO of BitMEX published an Ethereum prediction. In a post titled “Five Ducking Digits”, Hayes makes the bullish case for the second cryptocurrency in terms of market cap.
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Ethereum is trading at $3,400 as of the writing. The last 24 hours have seen a profit of 5%.
NewsBTC reported that Hayes believed the new financial system was created by the conflict between Russia and Ukraine. In response, the international community placed sanctions against Ukraine.
Russia was cut off from international financial systems, the social elite of Russia have been punished and their gold reserves confiscated. Hayes claimed that the Vladimir Putin-led nation and other superpowers will work together to overthrow America’s dollar as global reserve currency.
As people flee from stores of value and neutral monetary systems, this will result in higher Gold and Bitcoin prices. Hayes’ latest post follows this idea of the global financial crisis that will benefit cryptocurrencies.
Hayes’ Prediction on Ethereum: Why The Financial Sector Will Accept It
Two main elements are what BitMEX used to argue that Ethereum’s appreciation will be due. 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.
Institutions will now be able trade the cryptocurrency and make investment products without fear of backlash due to its consensus algorithm. When Tesla invested in Bitcoin, the company’s CEO, Elon Musk, had to stop accepting it as a form of payment.
It is believed that the detractors of the first cryptocurrency consider it a threat to our environment.
After Merge Ethereum will reward its validators with rewards for staking ETH, and securing it. 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.
It could be adopted more widely. 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.
The biggest winners will be ETH holders
“The Merge” will provide stakers, according to data provided by Hayes, with an initial 8% to 11.5% Annual Percentage Rate (APR). ETH is an asset that functions like a bond and will offer new investment options.
A bond can be described as any type of debt between two entities, such a government, company 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 added:
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 (…)
The full implementation of PoS capabilities and this trading opportunity will draw new capital. Money from “ESG-friendly” investors looking for crypto exposure, but unable to obtain as long as PoW is the dominant consensus algorithm. Hayes also added:
All sentiment will shift when ETH can be considered an ESG friendly, POS-based blockchain. ESG funds then have the ability to invest in it. This opens up ETH to hundreds of billions of USD worth of fiduciaries who due to ETH’s classification, can now safely invest (…).
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Hayes expects ETH to perform better in layer-1 over the next few months. This event could take market share from the “ETH Killers”, such as Cardano, Terra, Avalanche, Solana, and Polkadot.