Nick Chong · 4 days ago · 2 min read
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Both Bitcoin and Ethereum have seen stellar performances from their 2020 lows, both gaining 140 percent since the “Black Thursday” crash seen on Mar. 12 and 13.
While impressive, top analysts expect for these two leading cryptocurrencies to head even higher in the months and years ahead, citing the imminence of two of the most important events ever in the calendars of Bitcoin and Ethereum holders.
If Ethereum 2.0 and Bitcoin’s halving isn’t a bull market catalyst, “nothing is”
According to David Hoffman — COO at tokenized real estate platform RealT and the co-head of the Bankless podcast and newsletter — there are two fundamental events in the coming months that will act in tandem to be a perfect bull market catalyst: the Bitcoin block reward halving and the introduction of Ethereum 2.0 in the summer.
Hoffman was so convinced of this that he wrote that “if that’s not a catalyst for a bull market, then nothing is.”
Ethereum 2.0 phase 0 expected end of summer.
Staking goes live.
ETH 2 execution risk significant reduction.
Meanwhile, Bitcoin halvening in 2 weeks.
If that’s not a catalyst for a bull market, then nothing is.
— DavidHoffman.eth (@TrustlessState) April 30, 2020
Other analysts would agree.
In approximately 10 days as of this article’s writing, Bitcoin will see its inflation rate instantly cut in half by a halving, when the number of coins per block is cut in half by the protocol.
It’s an event that a top quantitative analyst with the moniker of “PlanB” found will give Bitcoin a fair value of around $288,000, over 3,000 percent higher than the current market price. This high value was derived by finding that BTC’s market capitalization can be derived by analyzing its inflation rate.
Adding to the bull trend, in a few months, Ethereum developers will roll out Ethereum 2.0. It’s an upgrade that will move the cryptocurrency awake from a mining consensus mechanism to staking, which incentivizes dedicated holders to stake their coins in exchange for rewards.
As Hoffman explained in a recent episode of Bankless, the introduction of staking will strongly decrease the amount of ETH on the open market, resulting in a supply shock that will favor price appreciation.
This was echoed by Adam Cochran, partner at MetaCartel Ventures, who wrote that the introduction of ETH 2.0 will create a massive societal economic shift.
Macroeconomic backdrop favors crypto’s growth
Adding to these fundamental trends, analysts have observed that the macroeconomic backdrop is starting to favor decentralized cryptocurrency more and more.
As reported by CryptoSlate on an earlier date, Raoul Pal — an ex-Goldman Sachs executive and former hedge fund manager — suggested in a research note that he sees a genuine chance that there is a risk of “the failure of our very system of money” or at least a collapse of the “current financial architecture.”
This comment was made in reference to the fact that central banks are starting to debase their currencies at a record rate while there’s a growing chance that some of the $250 trillion worth of global debt starts to unwind. Add potential deflation into the mix, Pal wrote, and you have a potential for fiat money to come under pressure.
According to the prominent investor, that’s where crypto comes in. On Bitcoin, in particular, Pal said:
“It is an entire trusted, verified, secure, financial and accounting system of digital value. […] It is nothing short of the future of our entire medium of exchange system, and of money itself and the platform on which it operates.”