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Arthur Hayes, the former CEO of BitMEX, has said that the price of Ether (ETH) could reach $10,000 by the end of the year. Ethereum has witnessed a massive decline since the beginning of the year, but Hayes notes that a bullish trend could be formed over the coming months.
Ether could reach $10,000 by year-end
Hayes noted that the cryptocurrency market was currently at or near the bottom of the currency cycle. Therefore, the possibility of a comeback was significantly high over the coming months.
The former CEO of the leading crypto derivatives platform said that the Federal Reserve would continue increasing interest rates during the third quarter. This could cause more dips across the cryptocurrency market.
He further said that the market bottom could have been created after the plunge of the UST stablecoin. He added that the growing risky nature of the environment had pushed venture capitals towards cashing out their LUNA investments. This created a liquidity crisis that triggered a dip in the stablecoin’s value.
Your capital is at risk.
As per his analysis, UST came off the peg after people swapped their UST for other fiat currencies and stablecoins. This worsened the situation and caused a massive collapse of the LUNA token because the Terra team was also minting more tokens.
“The TerraUSD collapse was an indirect result of global central bank liquidity tightening. As such, I believe this event brought forward pain that would have occurred anyway months down the line as the Fed and others continued to tighten liquidity conditions,” he said.
He noted that the collapse of the UST stablecoin was inevitable. The increased interest rates only sped up the process, but the stablecoin would have collapsed eventually “because of how it was programmed.”
Prices will not gain in the short term
Despite the market being at the bottom, Hayes added that a quick increase in prices could not happen in the immediate future. He said the market would remain unstable in the short term, and only the Federal Reserve could change the current policy to trigger a comeback in the market.
“A choppy price action will eviscerate the capital of short-term traders who half-heartedly believe this is the bottom… This is why the politics and macroeconomic picture must coalesce before the crypto market can march meaningfully higher,” he added.
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