Former Goldman Sachs executive Raoul Pal is predicting a supply shock coming for Ethereum as the network completes its long-awaited Merge update.
Speaking in a recent video update, Real Vision’s Raoul Pal said that Ethereum’s transition to proof-of-stake will result in a “supply shock” due to the sudden reduction in total supply and elimination of miners. The update, dubbed The Merge, is expected to take place in September and will result in roughly a 90% reduction in Ethereum’s total supply, in addition to various network upgrades.
Pal says the resulting market fluctuation will prove bullish for Ethereum and help the second largest cryptoasset by market capitalization outperform Bitcoin. Pal expects the supply drop to reduce selling pressure on Ethereum, thereby paving the way for price increases.
He also noted the significant market change brought about by eliminating miners. Ethereum’s transition to proof-of-stake will do away with the need for miners on the blockchain, thereby reducing their influence on the price.
As reported by The Daily Hodl, Pal explained,
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.
Pal predicted that Ethereum will attract a large amount of capital to staking following the update. He speculated that the total amount of ETH being staked could rise from 9% to 30% post-update, arguing that investors would want to capitalize on the guaranteed gains.
According to Pal, the sudden jump in staked ETH would likewise reduce the supply for trading, which will prove bullish for the price.
Image Credit
Featured Image by elifxlite via Pixabay
Source: Read Full Article
-
$ETH: Cumberland Says After the Merge $20M/Day of Miner Selling Pressure Is Gone
-
Ethereum Merge Could Open The Network To Attacks From Bad Actors, Says Security Experts
-
Massive Growth Ahead: Standard Chartered Predicts When Ether Will Explode To $8,000
-
Ethereum’s Vitalik Buterin Claps Back At PoS Skeptics Ahead Of The Merge
-
Ethereum ($ETH) Has ‘Most Compelling Growth Outlook’ in 2023, Says CoinShares Survey