Macroeconomics expert Raoul Pal pointed to a development that could help the leading altcoin Ethereum (ETH) outperform Bitcoin (BTC) once again. He said that ETH is ready for a series of supply shocks. Here are the details…
Real Vision CEO expects supply shock for leading altcoin
In a new video update, Real Vision CEO talks about Ethereum’s transition to proof-of-stake. He says it will remove a significant amount of selling pressure as participants take their crypto from the market and stake. In addition, Pal predicts that Ethereum will take advantage of the absence of miners who sell to pay for its operational costs, such as a proof-of-work blockchain. The CEO uses the following expressions:
What’s really interesting here is what’s about to happen, a supply shortage… The miners are no more. Therefore, all of the miners’ activities to sell the tokens they earn, they probably sell about 80 percent of the tokens they get just to fund their own activities. That’s about a billion or 2 billion per month, out of the market. So, it’s a small supply shock. No daily pressure from miners rewarded with Ethereum…
According to the economist, about 9 percent of all Ethereum is currently invested in staking, according to most estimates. This number could rise to about 30 percent. However, according to Cuban; either way, it will attract a lot of capital for staking. This in itself gets interesting because if all ETH gets 30 percent of stakes, then 30 percent will be dormant. He says that leaving this 30 percent completely out of the system will cause a “major supply shock”.
ETH can be deflationary
Pal also says that ETH could become a deflationary asset post-merge, comparing its upcoming tokenomics to a stock buyback that simultaneously increases demand and reduces supply. The former Goldman Sachs executive says the charts support his hunch that Ethereum is about to outperform Bitcoin. According to Cuban, ETH/BTC is poised to exit a multi-year declining channel. It makes Ethereum a much more interesting bet for the macro investor. Cuban uses the following expressions:
So, I think most of this activity has become very interesting. If I start looking at the price, we talked a little bit about Bitcoin. But if I look at the Ethereum and Bitcoin chart, it seems to me that it is very close to breaking out of this downward channel. As you know, ETH has been a big part of my portfolio for a long time and I’ve been very well rewarded for it. That’s why I’m more interested in Ethereum than Bitcoin.
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