There has been a recovery in the cryptocurrency market since mid-June. Then, cryptocurrencies pulled back sharply on Friday, along with the stock market. While some users in the space have expressed negative views on the crypto space, some remain hopeful. One of them was the famous economist and investor Raoul Pal. Pal noted the magnitude of the “risk/reward” ratio for an altcoin project in particular. Here are the details…
Pal shows no signs of concern in the Bitcoin and altcoin space
Raoul Pal, a former Goldman Sachs executive and macroeconomic expert, isn’t too worried about weakness. The economist says all he sees is “pre-Merge crypto volatility.” cryptocoin.com As we have also reported, Ethereum will perform the expected Merge on September 15th. This is seen as the “most important update/upgrade” in ETH history.
Thanks to the change in the network, the PoW consensus mechanism will no longer be operational in the ETH network. As it is known, the proof-of-work (PoW) mechanism performs the production/transactions of ETH as a result of mining. However, on the grounds that mining consumes a lot of energy, many thought that the PoW separation should come. Therefore, Ethereum’s existing execution layer will merge into the new proof-of-stake (PoS). Thus, it will eliminate the need for energy-intensive mining.
Pal: Ethereum, the safest allocation
Pal recently stated that Ethereum remains “the safest, easiest allocation.” He also said that he expects a demand shock for crypto. He stated that the project received increasing demand from institutional investors. He said new miscarriages are unlikely. He apparently suggested that it is unlikely that the crypto market will see mid-June lows again. However, Pal said that if all cryptocurrencies experience new corrections, they will continue to accumulate.
He thinks that with the current price situation, ETH’s “risk/reward ratio” has become “really attractive”. Pal predicts a 10-fold rise, pointing to a 1 in 20 rate, while forecasting a 50 percent downward move. Thus, it explains the “risk/reward” expectation. Meanwhile, according to the latest data, Bitcoin surged 1.4 percent after its latest drop. With a market cap of $412 billion, the current value of the leading cryptocurrency stands at $21,542.
Ah, the old cheeky pre-merge crypto shakeout I see… I don't expect new lows but most likely a gut-check quick drop, but let's see.
New lows = keep adding (for me) as 2-year risk/reward gets really, really attractive
50% downside vs possible 10x upside = 20:1 R/R#ETH #BTC
— Raoul Pal (@RaoulGMI) August 19, 2022
Ethereum, which rose above $ 2,000 at the beginning of last week in anticipation of the merger, is trading at $ 1,634 at the time of writing. In other words, the second largest cryptocurrency by market cap lost 17% on a weekly basis. Behind this decline is ETH being affected by the general market and BTC’s price movements. Still, the excitement for Merge continues among investors and time will tell what will happen until September 15th.
