Former CEO BitMEX Arthur Hayes has hinted that he may rebalance his Bitcoin (BTC) investment in favor of Ethereum’s native ETH token, arguing that a massive wall of money will enter ETH once it is seen as an ESG-friendly, lucrative asset to push its price north. from 10,000 US dollars.
In a new essay titled Five Ducking Digits Hayes said he used to have a portfolio of 50% bitcoin and 50% ether.
However, given his opinion that ETH is now relatively cheap compared to the rest of the cryptocurrency, he said that 25% bitcoin and 75% ether are a more appropriate target.
Hayes said this is his preferred distribution, despite admitting that there are no macro indicators here and that both the stock and the price of ETH could fall by 30-50% in the coming US recession.
He said that in order for bitcoin to survive such a crash, the narrative would have to change from seeing it as just a risky asset, and seeing it as a store of value and hedge against inflation, noting that it is still the hardest form of money ever. or created.
On the other hand, Ether is not money, Hayes said, calling it the commodity that powers the world’s largest decentralized computer.
Since global real rates are extremely negative, I want to own an asset that has a positive return in its own currency and for now, i.e. ETH, Hayes said, adding that Bitcoin does nothing.
Therefore, in terms of net interest rate differential, I should own more ETH than bitcoin. This will change when the price of ETH rises enough to account for future ETH cash flows, he said before moving on to his 2022 ETH price prediction:
When the dust settles at the end of the year, I believe ETH will trade above $10,000.
The investor also clarified that he believes ETH is arguably the least expensive of the major tier 1 smart contract platform tokens when viewed against the backdrop of fundamental activity taking place on the platforms.
According to Hayes, ETH is substantially cheaper than Solanas SOL and Polkadots DOT native token, and much cheaper than Cardanos ADA token, which Hayes believes is traded solely on opium.
If you are a wealth allocator who either already owns some of these coins or has to choose which Smart Contract Level 1 coin to invest in, would you like to buy the cheapest one, the former CEO of the exchange said.
He added that he expects ETH to significantly outperform other competing Tier 1 chain tokens that refer to themselves faster and cheaper than Ethereum.
This narrative ran from 2020 until the end of 2021, he said, but Ethereum is now maintaining extremely positive price fundamentals thanks to capital inflows and returns.
Hayes also noted that the ESG (environmental, social, and governance) narrative around ETH will attract more investors to the asset as the network transitions to a less energy-intensive Proof-of-Stake (PoS) consensus mechanism.
Hayes predicts that a massive wall of ESG-compliant money will come from more traditional investors as investment advisors finally start offering ETH as more than bonds their clients can invest in.
He wrote in an essay that there is a significant amount of cash that managers would like to set aside for crypto. but the proof-of-work consensus mechanism is considered energetically wasteful.
Moreover, another reason why its competitors may return to Ethereum is the vulnerability of block-to-block bridges. This was demonstrated by the recent breach of the bridge connecting the Ronin sidechain to Ethereum, where the attackers got away with over $600 million.
Hayes wrote that if traders get tired of worrying about their bridge blowing up next, they can simply move their TVL [общую заблокированную стоимость] and business back into ETH, noting that it would negatively impact networks competing with Ethereum.
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