After the semblance of recovery seen in the cryptocurrency market since the mid-June low, digital currencies fell sharply on Friday, along with the equity market.
Friend roots for cryptos: Former Goldman Sachs executive and macroeconomic expert Raoul Pal, however, is not too concerned about the weakness. “Ah, the cheeky old pre-merger crypto crisis I see…” the economists said.
Ethereum ETH/USD is about to undergo the most significant upgrade in its history, called Ethereum merger, which is expected on September 15. This represents the joining of Ethereum’s existing execution layer with its new proof-of-stake consensus layer, which will eliminate the need for energy-intensive mining.
Pal recently said that Ethereum remains “the safest and easiest allocation” and anticipates a demand shock for the crypto, Dailyhodl reported. He sees increased demand from institutional investors.
See also: How to buy Bitcoin (BTC)
Accumulation time: Further lows are unlikely, he said, seemingly suggesting that the crypto market may not return until its mid-June lows. He most likely sees it as a “rapid gut drop.”
If all crypto hit new lows, Pal said he would keep adding. He felt that the risk-reward ratio over two years becomes “really attractive”.
“50% down vs possible 10x upside = 20:1 R/R,” Pal said.
Ah, the cheeky old crypto pre-merger shakeout I see… I don’t expect any new lows but most likely a quick gut drop, but let’s see.
New lows = keep adding (for me) as the 2 year risk/reward becomes really, really attractive
— Raoul Pal (@RaoulGMI) August 19, 2022
At the last check, Bitcoin BTC/USD slid 0.89% to $21,263.41 and Ethereum was down 5.12% to $1,622.10, according to Benzinga Pro data.
Photo: Courtesy of CoinDesk on Flickr