$ETH: BitMEX Co-Founder Explains Why the Ethereum Price ‘Has to Rise’ After the Merge

0

BitMEX co-founder Arthur Hayes, a well-known cryptocurrency enthusiast and trader, has recently discussed Ethereum’s move to a Proof-of-Stake (PoS) consensus algorithm through its Merge upgrade and its implications for traders.

During an interview with Bankless, Hayes confirmed that he was long on Ethereum ahead of the upgrade, as Ethereum’s issuance is expected to drop after the Merge. Based on Ethereum’s supply dropping and demand for it remaining the price will likely go up.

Hayes noted that Ethereum’s post-Merge issuance cut could be a significant upward catalyst, to the point it could be “more powerful” than the current macro environment, which has been seeing risk assets – including stocks and cryptoassets – plunge as central banks throughout the world turn hawkish to tame inflation.

The Merge is set to cut Ethereum’s daily emission rate to 1,600 ETH, down from around 13,000 ETH per day. Taking into account Ethereum’s network burns a significant portion of transaction fees, some even suggest the cryptocurrency could become deflationary in the near future.

Hayes noted that Ethereum I is still the leading blockchain when it comes to decentralized finance, and is still seeing heavy usage despite the ongoing bear market. He said:

Unless you’re telling me that DeFi usage falls off a cliff with issuance as well, then you’re saying demand is greater than supply, therefore the price has to rise in my opinion,




During the interview, Hayes agreed that the trade was a “no-brainer” as Ethereum will undergo structural changes. He also revealed he bought Ethereum call options with a $3,000 strike price, which he said was a strike price that “everyone is trading.”

It’s worth noting that the BitMEX co-founder is well-known for being bullish on Ethereum over the last few months, suggesting numerous times the cryptocurrency could surge to trade at $10,000 a token.

He added that the Merge’s effects on the market would even be stronger if the upgrade didn’t come after a months-long slump that has seen most cryptocurrencies lose most of their value. The upgrade itself, Hayes conceded, could be a “sell the news” event that sees Ethereum’s price plunge up to 20% after occurring.

The Ethereum Merge is expected to occur less than a week from now. Ethereum holders, due to a group of miners and developers planning to fork the Ethereum blockchain, could be able to receive $ETHW tokens via an airdrop if there’s a chain split.

Image Credit

Featured Image via Unplash

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here