According to Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, Ethereum (ETH) will certainly reach USD 10000 by the end of 2022. He believes that ETH’s planned transition to a proof-of-stake (PoS) architecture will make it more comparable to a bond, which has the potential to dramatically improve its institutional attractiveness.
Hayes further stated that ETH accounts for at least a quarter of his current investments. In the near future, he expects to expand his exposure to ETH ahead of the token’s widely predicted transition. ETH was recently trading over USD 3500, its highest level this year.
Reasons behind anticipation over ETH price to USD 10000 in 2022
The Ethereum network is expected to merge its 2.0 and 1.0 chains later this year, after which ETH is likely to adopt a PoS method, which will be rewards staking rather than mining. Initial predictions imply that ETH’s annual returns under such a model might be as high as 11 percent, which is far greater than what conventional debt markets can give. Hayes anticipates that the prospective returns will draw a large amount of institutional capital, driving ETH values to record highs by the year-end of 2022.
The PoS mechanism is projected to almost eliminate ETH’s processing and energy requirements, putting it even closer to rules that analyse cryptocurrency’s high environmental cost. The change also makes the token better affordable to enthusiasts who do not have mining hardware.
ETH and debt securities comparison
Staking in the ETH would be analogous to investing in time-bound debt securities, with both actions posing practically negligible risk. Bonds provide consistent, reliable returns over a significant period of time for institutional investors. Due to low borrowing rates, Hayes further believes that it is theoretically conceivable to leverage low-cost US dollar loans into ETH staking for profits while retaining the majority of the healthy 11 percent margin.
In anticipation of its PoS switch, the world’s second-largest crypto has already experienced favourable price activity. The token gained almost 16 percent in March and was the last trading above USD 3500, its highest level this year.
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