Former BitMEX CEO Arthur Hayes predicts a huge rally for Ethereum (ETH) if two possibilities align.
In a new blog post, Hayes says that a catalyst that could spark a strong rally for Ethereum is the success of its upcoming transition to a proof-of-stake (PoS) consensus mechanism, which is scheduled to launch in September.
The long-awaited update will allow the Ethereum mainnet to merge with the Beacon Chain, which already runs the POS system. Merge, which will create Ethereum 2.0, aims to address the network’s scalability issues by setting the stage for future upgrades.
If Ethereum’s upgrade proves successful, Hayes says another factor that could act as a tailwind for ETH is the Federal Reserve once again adopting loose monetary policies.
“Fed Pivot + Successful Ethereum Merge (ie, what I’m guessing will happen and the best case scenario for ETH). In November 2021, the Fed was printing money, shitcoins were rising, and attention began to turn to the bullish narrative surrounding the upcoming Ethereum merger in 2022. Therefore, I will use $5,000, the Ether psychological barrier fell just short of that at the time, as my honor target for this script.”
At the time of writing, ETH is exchanging hands for $1,728. A move to Hayes’ upside target suggests upside potential of around 200% for the leading smart contract platform.
Should the Fed maintain a tight monetary policy and Ethereum undergoes a successful PoS transition, Hayes says the second largest crypto asset could appreciate to $3,562.
In a third scenario where Ethereum’s transition to PoS fails and the Fed maintains tight monetary policy, Hayes says the price of ETH would drop significantly from current levels.
“There is no free money and no help from [Ethereum co-founder] Archangel Vitalik [Buterin] it takes us back to the dark ages. That would be the recent low of $1,081 – which is my price prediction for this scenario.”
In a fourth scenario where Ethereum’s PoS transition fails and the Fed loosens its monetary policies, Hayes says ETH will fall slightly to the $1,600 level.
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