In recent times there have been alot of activities going on in the Ethereum ecosystem with their new update which is said to launch in few weeks from writing. In a economic session with a macro economic expert Raoul Pal said that Ethereum is expected to witness a massive Ethereum supply shock which will put the second largest cryptocurrency according to it’s market capitalization set to outperform the primary token bitcoin.
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Ethereum update which is it updating to proof of stake giving it’s investors to earn yield from their investment. The update is said to happen in September from their publication, this might possibly be a tentative date. This venture will reduce the sell pressure to an extent giving the users the opportunity of staking their asset.
What are the benefit for this Ethereum move? Well during the session Raoul Pal said that the proof of stake will be beneficial to Ethereum as the influence on miners on the market price due to the fact of paying off operational cost they are force to sell pushing the market value further down.
“What’s really interesting here is this is a supply reduction of really monumental proportions that’s about to happen…
There are no miners anymore. So, therefore, all of the activity of miners of selling the tokens that they’ve earned, they probably sell about 80% of the tokens that they get just to fund their own activities. That’s about a billion or 2 billion a month, that’s out of the market. So, that’s a small supply shock. There’s no ongoing pressure every day from miners who’ve been rewarded with Ethereum…
Then the staking activity, there’s currently about 9% of all Ethereum staked, by most guesses. That number should rise to about 30%. Because initially, we should see some outsized deals may be up to as high as 20%, maybe it’s 15%, who the hell knows.
But either way, it’s going to attract a lot of capital into staking. And so, that becomes very interesting itself, because if it gets up to 30% of all ETH staked, that’s 30% that is dormant. That 30% cannot be used for DeFi [decentralized finance], CeFi [centralized finance], rehypothecation, shorting, liquidity provision, nothing, it’s out of the system. Okay, that is a massive supply shock.”
At the point of writing Ethereum was selling slightly above $1k and bitcoin slightly above $20k.
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This looks promising. How high do you think the ETH would go before September? Any random calls?
I really don’t know Nate
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