ARK Invest Reveals Ethereum (ETH) Bullish Outlook, Says Crypto Market Is Returning to Risky Environment
An analyst at investment management firm Ark Invest says Ethereum (ETH) may start to gather more bullish momentum as crypto markets return to a risk-on environment.
In a new interview on the For Your Innovation podcast, ARK analyst Frank Downing says that dust is settling in the crypto market after months of bearish price action.
“I think we saw something interesting just last month, which is when the market is going down and we are in this speculative cycle, you have the asset at the bottom of the range. riskier, so ETH and assets that are built on top of it compared to Bitcoin sell off really hard, not necessarily trading on fundamentals but a completely risky market.
Only in the second half of July, I think that started to change and we saw the marginal bull market start to trade more on the fundamentals. “
The risk-off environment generally refers to a period when riskier assets like cryptocurrencies and stocks are sold for safe-haven assets like the US dollar.
Then, Downing makes Ethereum's bull case focus on its much-anticipated transition from proof-of-work consensus to proof-of-stake, which is expected to happened in mid-September.
“In the case of ETH, this mostly revolves around the progress that has been made around their transition, the network’s transition to a proof-of-stake consensus called The Merge. While this has been anticipated for over seven years since the network's launch, we're now looking more closely than ever to see what transition is actually happening…
[New Testnet] most] shows the promise that Consolidation will actually take place and a lot of parties have had this technical and enforcement risk in the past as well as changes to ETH's tokens that reduce token issuance Newspapers and stories surrounding proof-of-stake versus proof-of-work consensus have led to many people being interested in buying ETH as a token.
And so we've seen the ETH/BTC pair or ETH price against Bitcoin outperform, which is quite a departure from the risk-on period we've seen. So relatively, [the market] has returned to risk for these asset classes. According to Downing, the strength of Ethereum is absolutely positive for the long-term health of the digital asset space.
“This is what we would like to see, this long-term uptrend in the value of ETH against Bitcoin as a sign of the growing strength of the entire crypto ecosystem.
If you look at what we classify as the financial and internet revolutions compared to the monetary revolution represented by Bitcoin, which represents about 50% of the crypto market, and ETH is the dominant asset. in that group. So seeing this strength is a net bullish trend for cryptocurrencies in general. ”& Nbsp;
Ethereum is trading for $1,480 at press time, down 5.6% on the day.
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Aug 29, 2022