Exchange of derivatives Arthur Hayes, the founder of BitMEX, wrote today to express his opinions on the impact of the Ethereum merger and whether the Federal Reserve (Fed) will resume money printing. If the Fed changes and Merge is successful, he predicts that ETH will reach $5,000.
In the most recent blog article, which was published today (5th), Arthur Hayes, the founder of cryptocurrency derivatives exchange BitMEX, outlined two probable occurrences that are likely the most concerning for the entire investing market:
Will the Fed reverse course and announce a rate reduction or resume expanding its balance sheet (i.e., printing money)?
The Ethereum Merge: Will It Work?
Fed is in a pickle, but plans to resume creating money
According to Arthur, the Fed is raising interest rates at their quickest rate in decades despite inflation appearing to be showing no signs of slowing down and the likelihood of an economic collapse increasing as monetary policy has been tightened.
Given the data, Arthur stated that we are almost certain to raise rates by 0.5% to 0.7% at the September meeting. Arthur also stated that even if the economic data is very disappointing, it is unlikely that the Fed will act immediately. However, Arthur believes that the Fed will resume its “money printing machine” mode after the midterm elections, pumping trillions of dollars’ worth of liquidity into the financial system.
According to Arthur, the Fed’s projections for the future direction of monetary policy lead to easing in 2019. Risk asset markets may therefore have reached their bottom and may soon resume trading in cheaper, more plentiful dollars.
Bullish on a merger to increase the price of Ethereum
Arthur asserts the following supporting data to support his claim that the merger will significantly boost the price of Ethereum:
- As a result of the merger, Ethereum is now a deflationary currency, and usage is anticipated to expand as DeFi becomes more well-known and accelerates the pace of deflation.
- Users must stake their ETH after converting to PoS in order to collect the bonus, and by doing so, they will effectively remove the money from the market.
- Although there are rival Layer 1 smart contract networks, several of them already use the PoS consensus mechanism. The only significant cryptocurrency to switch from PoW to PoS at the moment is Ethereum.
