BitMEX co-founder Arthur Hayes has given an upside target for leading smart contract platform Ethereum (ETH) as it approaches the highly anticipated upgrade to proof of stake.
In a new interview with Bankless, the crypto veteran says he’s bought call options for ETH with a strike price of $3,000.
Call options are contracts that allow traders to buy the underlying asset, in this case ETH, at a given price ($3,000). A call buyer makes profits when the asset increases in price, ideally past the strike price.
Says Hayes,
“I think that’s the largest strike [price] in terms of open interest on Deribit right now so I’d say… Let’s call it $3,000 by the end of the year…
Of course the Fed can influence that lower… Maybe the Fed’s going to raise rates to 20% overnight. I don’t think that’s going to happen but at the end of the day, if there’s a certain amount of demand and the supply isn’t there to meet it, the price goes up, and it doesn’t matter if the cost of dollars is 4% or two or 25%.
That’s why I like the trade because there’s nothing to do about the liquidity constraint of the dollar which a lot of crypto is, it’s a liquidity play on the global reserve currency because that’s the system that we’re rebelling against.”
Hayes has remained overall bullish on the second biggest blockchain by market cap as it moves towards the merge and said last week that Ethereum’s big upgrade could lead to a “free money” trading opportunity should a proof-of-work fork arise.
“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.”
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