Arthur Hayes predicts Ethereum will reach $5K after merge if Fed pivots Arthur Hayes predicts Ethereum will reach $5K after merge if Fed pivots
Hayes revealed that the current price of Ethereum represents a huge buying opportunity for investors as it is currently selling 76% below his model price of $2815.
2 min read
Updated: Aug. 7, 2022 at 3:44 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
BitMEX’s founder Arthur Hayes has predicted that Ethereum’s (ETH) price could rise to $5,000 if the merge upgrade is successful and the Federal Reserve goes ahead with its pivot.
Hayes also revealed that the current price of Ethereum represents a tremendous buying opportunity for investors as it is selling 76% below his model price of $2815.
Hayes: Eth to $5000
In an August 5 post, Hayes said the Fed’s pivot toward “supporting growth rather than fighting inflation” would lead to an expansion in quantity –a situation where the Feds would have to print more money to support the economy.
In this scenario, when Ethereum Merge eventually happens in September, he believes the digital asset would be able to breach the $5000 mark as it would become a deflationary asset with high demand.
“The rate at which Ether is issued per year will be reduced by ~90% under the new PoS model … the Ether taken out of circulation will only increase as the network grows in popularity … all of these factors together should still drive the price of Ether up exponentially.”
No Fed pivot + successful Ethereum merge
In a situation where the Feds backtrack on its decision to support growth by printing more money, Hayes thinks the merge would still be able to push Ethereum’s price to $3562.
According to Hayes, the merge is expected to drive a “triple-halving’ event” for Ethereum. Since Bitcoin’s (BTC) price has always reacted positively to its halving, one can expect ETH’s price to respond similarly.
Other predictions
Hayes continued that if the Ethereum merge fails or is suspended and the Fed pivots its policies, there would not be any adverse effect on the asset price as it would still be able to maintain its current level of $1600.
However, several people would be left disappointed by the failed promises.
Explaining how he arrived at his $1600 prediction, Hayes said that Ethereum would have gone up by 1.72% without the excitement of the mergeย between June 17 and July 26.
So, a merge failure will drop the price to $1,099. But since there will be more liquidity from the Fed pivot, he expects ETH to eventually rise as it did between March 2020 and 2021 when “the Fed expands the money supply once more.”
Meanwhile, in a scenario with no Fed pivot and Ethereum Merge fails, Hayes predicted that ETH would likely return to its July 17 low of $1,081.
Ethereum Market Data
At the time of press 3:44 am UTC on Aug. 7, 2022, Ethereum is ranked #2 by market cap and the price is down 2.95% over the past 24 hours. Ethereum has a market capitalization of $204.81 billion with a 24-hour trading volume of $11.32 billion. Learn more about Ethereum ›
Crypto Market Summary
At the time of press 3:44 am UTC on Aug. 7, 2022, the total crypto market is valued at at $1.09 trillion with a 24-hour volume of $44.69 billion. Bitcoin dominance is currently at 40.45%. Learn more about the crypto market ›
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
BitMEX
HDR Global Trading Limited owns and operates BitMEX which is a trading platform that offers investors access to the global financial markets using only Bitcoin.
Arthur Hayes, a prominent figure in the world of cryptocurrency, co-founded the cryptocurrency exchange BitMEX and served as its CEO until recent events shifted his career trajectory.