Ethereum could still hit $10,000 by the end of 2022 according to former BitMEX CEO Arthur Hayes but the market will be choppy in the mid-term so let’s read more today in our latest Ethereum news.
The former co-founder of BitMEX Arthur Hayes said that Terra’s failure was a byproduct of the macroeconomic environment with the FEDs raising the rates and tightening the balance sheet. He also expressed the conviction of the market in the medium term and reiterated that Ethereum could reach $10,000 at the end of the year. The market is either nearing or at the bottom of the cycle and a comeback will start once the FED slows down the rate increase process.
In the latest blog post, the former CEO predicted that the FED will continue the process of rising interest rates in the third quarter and heighten the downward pressure that is imposed on the market. He also touted the possibility that the incident of UST dropping could have been a sign of a local bottom. Diving into the possibly rooted cause underlying the collapse of Terra’s ecosystem and he agreed with the suggestion that the broader risk-off environment pushed VCs to cash in on the investmetns all at once and lead to a liquidity crisis that drove the stablecoin’s price down. He added that once the peg fell off, people started swapping their USTs for other stablecoins which worsened the situation and culminated in a collapse of LUNA:
“The TerraUSD collapse was an indirect result of global central bank liquidity tightening. As such, I believe this event brought forward pain that would have occurred anyway months down the line as the Fed and others continued to tighten liquidity conditions.
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He clarified that the hawkish policies are only a catalyst as the final nail upon the Terra collapse since it was preordained because of the way it was programmed. By analyzing the correlations between BTC/ETH and the Nasdaq 100 in the recent equity selloff, Hayes concluded that crypto started to decouple from the risky assets and cited an observation as an indicator of the potential local bottom. As the prices of BTC and ETH are nearing local tops, Hayes predicted that Bitcoin’s bottom could be in the range of $25,000 to $27,000.
Despite being hopeful that the bottom is in, Hayes said that a quick ascent of prices could not happen in the immediate future and noted the market could remain unstable in the short-term but insisted that the changes in policy could lead to a market comeback:
“A choppy price action will eviscerate the capital of short-term traders who half-heartedly believe this is the bottom…This is why the politics and macroeconomic picture must coalesce before the crypto market can march meaningfully higher.”
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