Bloomberg’s lead commodity strategist Mike McGlone is predicting rallies for Ethereum (ETH) as he says the leading smart contract platform is poised to change the landscape of financial technology.
In a new segment with BNN Bloomberg, McGlone says Ethereum is able to support its value with the reality that dollar-pegged stablecoins rely on its network to operate.
“[Ethereum] is basically doing to the world what Netflix did to Blockbuster. It’s revolutionizing fintech and things like that. The key thing about Ethereum is that it’s making possible the most widely traded cryptos on the planet [which] are tokenized versions of the dollar. Basically, the dollar is the most widely traded crypto. It trades more than Ethereum and Bitcoin together. And that’s because Ethereum tokens are making that possible.”
The analyst says that he expects ETH to start trending up against Bitcoin (BTC) fueled by shrinking supply and growing demand. According to McGlone, a favorable supply to demand ratio means price “must go up’ for ETH.
“That trend of Ethereum still outperforming Bitcoin remains intact so it’s been hovering around this good support around $1,000, good resistance at about $2,000, but what it did this year was somewhat revolutionary.
It switched to a proof-of-[stake] platform which means virtually no consumption of energy in the midst of an energy crisis. Wow, that’s kind of win-win, so you’re doing well there. The key thing that I look at from a commodity standpoint is: ‘What’s going on with supply and demand?’
Supply is clearly going down and heading lower, and demand and adoption are clearly heading higher so I look at it as, unless something changes in those trends, price must go up over time. I look at price, it’s relatively too cold. It should go back up and continue to outperform Bitcoin. It has been outperforming things like the Nasdaq over time and what’s significant is that it’s been doing it with incrementally lower volatility. What does that mean? It’s migrating into the mainstream with maturation.”
You can watch the full interview here.
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