According to a former Goldman Sachs Executive – Ethereum will reach $30.000
A former Goldman Sachs executive makes a compelling case that Ethereum is the best cryptocurrency to trade, given its supply deficit, which is expected to increase both after the London update and post-London moves.
Scarcity is Ethereum’s biggest Threat to Bitcoin
In the opinion of the analyst and former Goldman Sachs executive Raul Pal, Ethereum represents the best trading platform on the market. As he noted, 13% of Ethereum is currently available for circulation on the Internet. What remains is either stashed, locked up, used as collateral, or used as a depository. As a result, it will be very difficult to supply ETH to the market, due to the significant shortage of supply in circulation while the demand is growing rapidly.
As a result, the price of Ethereum has increased sharply: Exponential demand with fixed supply leads to exponential price increases.
According to the former Goldman Sachs executive, the price of Ethereum could increase by 10 fold from the current price of $3,000 in the future. Specifically, he mentioned that the fundamental characteristics of ETH have changed significantly since the London hard fork, which unveiled EIP-1159, which introduces a burn on a portion of the transaction fees associated with ETH transactions. As a result of this mechanism, Ether could become deflationary, just like Bitcoin.
Halving for Ethereum with EIP 1559
At the time of writing, Etherchain reports that 25,100 ETH has already been halved. As soon as EIP-1159 was introduced, Trader Lark Davis pointed out that he expected the daily supply of ETH to halve:
PIE 1559 went into effect today. More than 3,000 ETH were burned. So we expect to burn about 6-7,000 ETH in the first 24 hours. There will be 12,000 ETH mined today. That’s about a 50% reduction in supply flow, and we’re still waiting for the major portfolios to get up to speed.
Davis believes that the supply of ethers will decline by 90% over the next few years as we will transition from the proof-of-work model to evidence of participation in the network. This should start taking place by the end of 2021, as follows:
Roughly speaking, we’ll go from 12,800 rewards per Ethereum block per day to about 1,280 per day, which will reduce annual inflation from about 4.3% to 0.43%. That’s a 90% reduction.
CryptoPunks and Defi were successful NFTs with Ethereum that were competing with Bitcoin. In an environment of scarcity, Ethereum is now taking on Bitcoin. What are the chances of the king staying in power?
It doesn’t matter whether your heart is with Bitcoin or with Ethereum. Both of them might be worth exploring in more depth. Check out our guide on How to get Ethereum if you want to get started or How to buy Ethereum if you want to buy some Ethereum right now.