Arthur Hayes Says Ethereum Merge Could Trigger ‘Free Money’ Opportunity for Crypto Traders

BitMEX co-founder Arthur Hayes is detailing his outlook on the crypto landscape after the Ethereum (ETH) merge is executed.

In a new interview on the Unchained Podcast, Hayes analyzes the potential success of a forked Ethereum token backed by proof-of-work miners whose business model will be abandoned once Ethereum moves on to proof-of-stake.

According to Hayes, it will be tough for a forked version of Ethereum to thrive in the long run because it will likely lack significant levels of adoption.

“The reason why Ethereum is valuable is because people use it, right? And the majority of people who use Ethereum are not very technologically savvy. So if I come to you and I said ‘hey, there’s ETH proof-of-work and ETH proof-of-stake – which one do you want to use?’

[Most people would say] I don’t know, what does that even mean? I just want to use Ethereum. I just want to go on MetaMask and go on Uniswap and buy some s**tcoins… I want to use this new ETH in that ecosystem and it’s pretty cool. I can just go on my browser and go to MetaMask and do stuff.

So to the extent that, from what I’ve observed, the service providers or the major decentralized applications in Ethereum are all following the proof-of-stake merge. They’re not following proof-of-work.

Some of the major stablecoins, like I think Tether and USDC, have come out and said we’re not following proof-of-work. So some of the major assets, some of the major services that the average user interacts with, are not going to be supporting this other change. So where are the users going to come from?…

The conclusion is: They will have no users.”

If a forked token launches when Ethereum switches to proof-of-stake, which is expected to happen in about a week, anyone holding ETH is positioned to receive an equal number of forked tokens.

Hayes says this presents a potential trading opportunity for investors.

“They may have a bit of people wanting to trade it like me because it’s interesting. And if it has a value above zero it’s just free money…

I think you could have a similar sort of analysis of Bitcoin Cash and some of these other – go back to all the different Bitcoin forks that happened back when we were talking about the block size debate in 2017. How many of those have actually done very well in a price performance versus the asset they were supposed to supplant, Bitcoin, from that period onward? And the answer is none of them because the users don’t care…

If I get some proof of work coins, I will try to sell them at a very opportune time. Maybe that’s as soon as they come out. Maybe it’s not. I don’t know. It depends on the hashrate, where they’re trading on different exchanges.

It’s such an interesting trading opportunity and just making sure that you’re all set up and ready to go and looking at the derivatives and spot [is key]. There’s going to be mispricings everywhere assuming that this happens…

And obviously the centralized spot exchanges are gonna have to support this thing. Whether or not they have the same appetite to do that today versus back in 2017 I don’t know.”