Shark Tank star Mark Cuban recently aired his thoughts on Ethereum’s upcoming “Merge” upgrade. He pointed out how Ethereum’s utility as a smart contract platform and as a deflationary asset are at odds. In an interview with Altcoin Daily on Sunday, Cuban explained that there is an inverse relationship between deflation and utilization of Ethereum. “If utilization goes up, and the value of a token goes up, then the cost to do something goes up,” he explained. “So you have…
Former hedge fund manager Raoul Pal said that Ethereum could finish the year above $10,000. However, he also thinks that there is a “decent chance” of “flipping” – referring to Ethereum becoming the most significant crypto by market cap, removing Bitcoin from first place. Moreover, he thinks that Ethereum’s competitors will do even better.
Raul Pal is a former Goldman Sachs executive and co-manager or GLG, a London-based global macro hedge fund. He has since retired from his position and started Real Vision, an online educational platform for investors. He uses his experience in predicting macro trends to share information with investors.
In an interview with InvestAnswers, he shared his views on investments and the future of crypto.
Pal is incredibly bullish on Ethereum. Earlier, in October, he said that ETH was the most undervalued coin out there. He also revealed that 82% of his holdings are in Ethereum.
In his latest interview, he predicted that Ethereum would more than double in the following weeks. In addition, the DeFi enabled crypto will be closer to $15,000 than $10,000, he claims.
ETH Flipping Bitcoin In 9 Months?
He also spoke about the potential for Ethereum to surpass Bitcoin in market cap. Bitcoin is currently the largest crypto by market cap, which is the value of all traded coins on the market. About 41% of all crypto value is presently in Bitcoin. Ethereum’s dominance is currently at 21%, and it’s growing.
Traders call the potential for Ethereum to become the most prominent crypto the “flippening”. However, the event would have enormous repercussions for the crypto markets.
I think that the flippening has a decent probability to happen in the next nine months, Pal said.
Pal suggested that the flippening would follow a crypto crash of about 15%. “We’ll probably start to see a sell-off in early January or late December because people are expecting something, and I think it will be wholeheartedly wrong because I see nothing but a wall of money coming in January/February/March.
However, he does not believe that prices would stay low forever. By the summer of 2022, ETH could skyrocket to $40,000, Pal thinks. However, he said that his “base case” is $20,000 by March. Currently, it is trading at $4,752.16, up 12% over the last seven days.
Ethereum is a token powering a blockchain network enabling intelligent contracts and decentralized apps. It is also the second-largest crypto by market cap. In addition, ETH also houses the most significant number of NFTs of any blockchain network today.
While Etehreum is criticising its high energy demands and transactions fees, supporters still believe in its potential. Developers are also working on a significant update that will drop by 2022. The update should fix some of the issues with gas fees, developers claim.
Layer two of ETH solves some of those problems, said Pal.
SOL, LUNA To Do Even Better
However, Pal believes that ETH’s competitors will go up even faster. This includes Solana and Terra (LUNA). Solana has reached a wider adoption recently, especially in the NFT space. The network is top-rated among investors that want to avoid high Ethereum gas fees. This allows the network to reduce the barriers to entry for developers and bring more functionality to users.
Of course ETH’s dominance, like Bitcoin’s dominance, will fall over time. Because new technology comes into the space, and solve different problems and have different orders of centralization and decentralization tradeoffs” he said. That is absolutely fine.
Solana (SOL) is currently trading at $228.79, up 8.82% over the last seven days. Terra (LUNA) is trading at $61.94, up 58.35%. Yet despite that, he still has most of his money in Ethereum.
“So why don’t I have all my money in those? Because I have less certainty because the network effects are less pronounced. So, therefore, I have to have a smaller bet”
While Solana has advantages in technology, it still needs to prove that it can attract a more comprehensive network.
“The network is not the technology, and it’s the people that use it. That is the key point,” he said.
ETH, SOL, Others Will Likely Coexist
Furthermore, he said that the rise in alternatives does not mean that Ethereum is going down.
“I don’t think ETH stops going up. The whole space is going up 100x over the next ten years, so you can back a lot of different horses and still make money,” he said.
He believes that different cryptos could coexist, as they could likely solve various problems.
I really think that people are trying to frame it too much about what we understand from the internet and less about what we understand from internet business,” he said. “Not all cloud storage went to Amazon. In fact, Microsoft is gigantic and Google is gigantic.
In the same way, different cryptos could solve various problems.
I think Solana plays a role. Could it be larger than ETH over time? Potentially. Could there be a flipping? Possibly. It depends on what people need the network for.
He also said that he doesn’t care that Ethereum’s dominance will fall over time. “I am not an ETH person,” he said, explaining that Ethereum for him is “the best horse to back with the best risk-adjusted return.”
Pal welcomed all technological developments in the space and described himself as a “crypto maximalist.”
ETH Whales Buying The Dip
Meanwhile, reports show that Ethereum whales are also bracing for an upswing in ETH. Over the last 12 days, the largest holders of Ethereum bought up 0.59% of the total supply of ETH. This coincided with the DeFi coin at times dropping below $4,000.
Santiment, an on-chain analytics company, said that the largest ETH wallets, those holding between 100,000 to 10 million ETH, have bought up 734,800 in ETH in the last 12 days. These holdings are now worth just under $3.5 billion.