Bloomberg’s senior commodities strategist Mike McGlone said that an altcoin project is on its way to becoming “the collateral of the internet,” similar to the way Bitcoin became a “global digital reserve asset.” But he predicts it faces a decline before it hits record highs.
Mike McGlone: This altcoin looks like the ‘early years of Web2’
Mike McGlone correctly predicted the Bitcoin price of $6,000, $12,000, $50,000, as quoted by Cryptokoin.com. In his current analysis, he says that, similar to Bitcoin’s success, Ethereum is on its way to becoming “the collateral of the internet.” However, a crash to $1,700 awaits before returning to record highs. Still, he highlights that the Ethereum ecosystem can continue:
Ethereum is in the top position to lead the wave of digitization, tokenization, DeFi, fintech and NFTs. The price of the No. 2 crypto moves in line with the total market cap of Coinmarketcap. Most NFTs are on Ethereum, meaning an expanding ecosystem represents demand.
There are some risks to consider
One of them is “merge” which will enable Ethereum to transition from PoW to PoS and reduce total energy usage by 99.95%. ”. However, McGlone warns, “there’s still a lot that can go wrong for the merge.” The short-term price outlook also looks risky due to crypto’s current correlation with risky assets such as tech stocks, which saw a big sell-off in April. Therefore, McGlone is not ignoring Ethereum’s drop to $1,700 from last summer’s low.
Further on, McGlone touches on the relationship of ETH price to other markets:
If the stock market falls further and lowers the tide for risk assets, Ethereum could repeat last summer’s performance and start around approx. It could revisit $1,700. After clearing out weaker, leveraged longs, Ethereum hit a new high near $4,800 in November. Ethereum, along with most risk assets, is facing headwinds as the Fed battles the highest inflation in 40 years. We see the potential for a return to the stock market to be a primary upside for Ethereum.
Finally, McGlone points out that the supply of Ethereum may be lower than Bitcoin:
According to Etherchain.org, from the beginning of August to April 25, approximately 2.2 million ETH (roughly 60% of normal supply) has been removed.
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