Macro analyst and former Goldman Sachs board member Raoul Pal says the native Ethereum cryptocurrency (ETH) presents one of the best trading setups he has ever seen.
Ether is the best transaction currently available on the market?
In a recent interview, Pal predicts ETH is shaping up to be the “greatest deal” as changes to Ethereum’s foundations will result in a significant reduction in the available supply of the second leading cryptocurrency.
– I released Global Macro Investor last Monday, there was an article there, it was about six pages long, and it was called “The Greatest Trade” and it was only on Ethereum. I think there is a better setup on the ETH right now. In March 2020, it was drawn on BTC – comments Pal.
Only 13% of all funds are free in the Ethereum network, notes a popular investor. Everything else is stacked, locked and stored. Adding to this the burning of part of the transaction fees the supply will be even more difficult and smaller.
– Ethereum that is freely traded drops every day. Most people will start stacking the ETH they have. An exponential demand meeting a steady supply equals an exponential increase in prices. One of the best hands I have ever seen – he adds.
Pal refers to the recently launched EIP-1159 update, which introduces a trading commission burning mechanism to the Ethereum network. By updating, a certain percentage of the fees are burned or removed from the system each time a transaction is processed.
At the time of writing, over 11,982 ETH worth $ 37 million has been burned.
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Ethereum will cut its daily supply by half?
Shortly after EIP-1159 entered the market, cryptocurrency trader Lark Davis predicted that the daily supply of Ethereum would be cut in half.
– EIP 1559 came live today. Over 3000 ETH was burned. Putting us on the course to burn about 6,000 to 7,000 ETH in the first 24 hours. 12,000 ETH will be extracted today. This is about a 50% reduction in the supply flow, and we are still waiting for the major portfolios to be updated Davis commented.
Davis is also looking at another upcoming Ethereum update that he believes could have a significant impact on ETH supply. The trader notes the merger between the Ethereum mainnet and the beacon chain, which will mean the transition of the protocol from proof of work to proof of stake.
Lark says the update could massively reduce the daily ETH emissions.
– Ethereum, as part of the merger with proof of work on proof of stake, will undergo a 90% reduction in daily emissions. Basically, we’re going to go from 12,800 ETH block prizes each day to around 1,280 ETH per day, essentially dropping the annual inflation rate from around 4.3% to 0.43%. This is a 90% reduction – explains the analyst.
An update due this year will enable ETH staking and will signal the end of mining operations on the Ethereum network.