Robert Steinadler, 10 months ago
Arthur Hayes is not only the founder of the 100x Group but also had a high-profile career in equity derivatives trading at Deutsche Bank before entering crypto almost 8 years ago. Ever since Hayes has not only become rich but he is also known for his market analysis and a sense of humor that fits in with all the anons and degens out there. Over the last couple of months, Hayes has repeatedly shared his point of view on inflation, US politics, the Fed, and most importantly the crypto market.
Why is this crypto legend all of a sudden bullish on Ethereum despite the generally harsh conditions?
There is still not a confirmed release date available but it is believed that Merge will most likely happen in September. Ethereum will switch from proof of work to proof of stake and once that is done the amount of new Ether that will be produced per block will shrink drastically. Since EIP-1559 was introduced a fraction of each transaction fee is burned.
The result is simple. The more Ethereum is been used for DeFi or NFTs, the higher the burn rate of Ether. While Ethereum has no supply cap the supply could potentially start to decrease with usage.
Hayes is counting on Ethereum to become scarce in the near future which means that it could possibly appreciate in price.
As we already reported last week a prominent Chinese Miner who goes by the name Chandler Guo is looking to fork Ethereum and preserve an alternative chain where miners can still make a living.
In Hayes’s opinion, the fact that an influential person like Guo is making that move rallying miners and exchanges behind him is a sign that the merge is most likely going to happen and is not be postponed again.
But there is more to it. Since Guo is opting for a hard fork each holder of Ethereum (ETH) will also receive “free” EthereumPoW (ETHPOW). According to Hayes that makes buying spot ETH even more attractive. Should ETHPOW be a success, then holders could simply sell their free coins from the fork creating an additional bonus to the trade.
Scarcity and free coins from Guo’s fork are not the major reason for Hayes to consider Ethereum the best trade. There are two factors that is concerning his analysis. The first one is the Fed and its policy. Since December 2021 the Fed’s decisions have pretty much determined the direction of the stock and the crypto markets.
The second factor is the Merge itself and the question of whether it is successful or not. Hayes identifies four scenarios taking the Feds stance and the success of the Merge into account. According to his belief, there are two possible scenarios where the outcome is positive and Ethereum appreciates in value. Another scenario is neutral and the fourth is bearish.
Of course, he could be wrong and the odds are different. Since Hayes is an absolute professional in trading his conviction about his analysis is very strong. It remains to be seen if his most bullish scenario comes true and ETH is seeing $5.000 this year.
May 16, 2023
Ethereum developers have come up with a simply solution against the arms races that unfold because of mempool related trading. They will simply burn the ETH that these participants collect! The effect is that Ethereum will become even more scarce/deflationary and - hopefully - valuable.
Apr 21, 2023
A saying that you hear often in any financial market is: history doesn't repeat but it often rhymes. The patterns of subsequent market cycles are never quite the same but similar. How does the current price action compare to previous bear markets? And what lies behind the price numbers?
Apr 17, 2023
Our online identity is currently managed by centralized institutions. It's either a government (log in with your social security number) but more often an e-mail provider or social media provider. Ethereum provides an alternative. Crypto wallet provider MetaMask has recently integrated this 'Sign in with Ethereum' functionality.
Apr 14, 2023
The prediction of bearish investors out there hasn't come to fruition. After yesterday's Shapella fork of Ethereum, the price didn't drop. On the contrary: the price pumped. Instead of unstaking and dumping their ETH on the market, there was quite a nice inflow of staked Ether.
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