Macro investment strategist Lyn Alden is pointing to an overlooked factor that could catalyze Ethereum price increases in 2022.
In a new interview on the YouTube channel Investment Made Simple, Alden explain why the amount of ETH locked in the Ethereum 2.0 staking contract serves as a bullish indicator.
"What I’m looking at is the Ethereum key contract. They launched Beacon Chain about a year ago and they are doing a staking contract. Once you lock the coins, they stay there until something changes or until the Merge is complete. So one thing I’ve been looking at is that Bitcoin is moving out of exchanges pretty quickly, but Ethereum is getting out of exchanges a little bit faster, partly because it’s going into that contract.
You basically have an illiquid supply forming and as long as that continues it should be a pretty strong bullish variable. I mean there are more than 8 million ETH in that contract now. I think maybe close to 9 million. I haven’t tested in a couple of weeks and so overall it’s a bullish catalyst.”
The Etherscan Distributed Ledger Explorer shows that investors have locked 8,793,458 ETH, worth $35.43 billion in the smart contract. Those who deposit ETH into the smart contract seek to become validators for the next iteration of Ethereum.
However, Lyn Alden is also concerned about the sell-off event when that locked ETH is opened.
"I think once the Merge is complete and unlocked, it could cause a massive sell-off event. That part of ETH is quite profitable and many investors will take profits, so I am not sure about the post-merge period. Ironically, it could be one of those sell the news events where there’s a lot of anticipation and then a catalyst to cool down for a while.”
Merge is a highly anticipated event for Ethereum as the upgrade confirms the transition to a proof-of-stake (PoS) consensus mechanism. The event is expected to take place in Q1 or Q2 2022.
Join Bitcoin Magazine Telegram to follow news and comment on this article: https://t.me/tapchibitcoinvn
Mr. Teacher
According to Dailyhodl
Follow the Twitter page | Subscribe to Telegram channel | Follow the Facebook page
Post a Comment
Post a Comment