BitMEX co-founder Arthur Hayes says that the market still hasn’t priced in the significance of Ethereum’s (ETH) successful transition to a proof-of-stake consensus model.
In an interview with Raoul Pal of Real Vision, Hayes says that the Ethereum network is now capable of supporting a new ecosystem filled with new businesses and protocols, something that hasn’t been priced in for ETH just yet.
“Obviously, the price of ETH isn’t reflecting this right now because we have overriding liquidity concerns, but I do think, assuming that the upgrade continues to go well, you have these interesting things [that are] going to create new businesses for the entire ecosystem, which might not be completely apparent today. It might take six to 12 months for people to go ‘Oh okay, now I get it.’ There are these new primitives that are completely… They owe their existence to the fact that there is this yield that I can count on if I stake my ETH.”
At time of writing, Ethereum is valued at $1,315, down nearly 20% since the merge happened on September 15th.
The crypto veteran says that overall, the crypto markets are either at or close to the bottom of the bear market. According to Hayes, Bitcoin (BTC) and crypto are probably in a choppy phase near the bottom before the next cycle begins.
“I think we’re chopping around the bottom. Do we hold $17,500 on Bitcoin? Maybe, maybe not. Do I think it goes much lower than that if it does break? Probably not. My whole thinking is like, ‘Okay who’s selling physical?’ We had a classic credit crunch, just like every other asset class…
And then you think, who’s gone bankrupt? The largest, most well-revered hedge funds, startups and personalities have all come out and say they had some financial difficulties. So the only people left who I think could sell in size are the miners, and then you have to wonder, wouldn’t they have had to sell in size in mid-June when prices are even lower than they are today when people were pulling credit and nobody could get credit?…
I just don’t see that intensity, which leads me to believe that we’re just chopping around at the bottom. We might not be here for a while. We might be here for a while. That doesn’t mean we’re going up anytime soon. But I guess I don’t know who else has a store over their head who has to sell to today.”
At time of writing, Bitcoin is trading at $19,337, flat on the day.
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