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According to Hayes, the 90-day correlation between Bitcoin and the Nasdaq-100 rose to a new record peak.
Arthur Hayes, a former BitMEX CEO, has predicted that two of the largest cryptocurrencies on the market will plunge much lower by the end of the second quarter. In a recent Medium blog post, the former BitMEX CEO stated that the price of Ethereum will plunge to $2,500 by the end of June.
Hayes also claimed that Bitcoin could test the $30,000 level before the start of the third quarter adding that the reason behind his predictions is that the two largest cryptocurrencies are “highly correlated” to the Nasdaq-100 stock market index.
According to Hayes, the 90-day correlation between Bitcoin and the Nasdaq-100 rose to a new record peak, stating that crypto and tech stocks are now intertwined, thus if tech stocks keep underperforming, cryptocurrencies will see ‘reds’ as well.
Hayes added that altcoins, regardless of the horrid year they are having, will still not be able to escape the upcoming carnage. Some altcoins on the market are already down 75% this year with experts predicting even a deeper plunge with the current regulatory threats hanging over the market.
Ethereum at press time was trading at $3,075, down 5.05% in the last 24 hours. The second-largest coin is however poised for a merge later this year, which has been tagged as a probable catalyst that might propel its price to greater heights. The digital coin has endured a bittersweet journey this year but recently went on a bull run as the recent developments around it, sent its price above the 3K mark for the first time in weeks.
The former BitMEX CEO expects the market to bottom out before the Feds switches its stance. Mike Novogratz, CEO of Galaxy Digital, also recently revealed that the crypto market might explode in value this year if the Federal Reserve were to switch back to monetary loosening.
Ethereum’s upward trajectory is expected to continue as the upgrades to its network draw nearer. The Serenity upgrade is reportedly in the second phase and will aim to make Ethereum a better blockchain by increasing the speed and lowering the gas fee. The update will also increase the number of users and developers on the Ethereum chain which will ultimately affect its price.
However, not everyone in the crypto space is buying the recent somewhat positive buzz around Ethereum. Vitalik Buterin, the co-founder of Ethereum in an interview, stated that Ethereum’s network is now flooded with players who are only after profits instead of the original vision of an egalitarian platform and that could derail its progress. “If we don’t exercise our voice, the only things that get built are the things that are immediately profitable,” he said.