The Merge Will Be to Ethereum What Halving Is to Bitcoin, Says Arthur Hayes
Arthur Hayes, former CEO of BitMEX, highlighted that The Merge will be to Ethereum what the halving is to Bitcoin. That is, he believes that the hard fork will have the power to impact the price of ETH after its implementation.
Hayes expressed his opinion in a new blog post where he explained how he expects Ether trades to react before and after The Merge. According to the executive, the price of ETH will rise until the date of the event, in September, and “explode” higher afterwards.
For Hayes, this will occur in the same way that Bitcoin rises and recovers during its periodic halving cycles.
In an article entitled “ETH-flexive”, Hayes centered his optimistic thesis around George Soros’ “theory of reflexivity”. According to the theory, there is a feedback loop between market prices and the expectations of market participants for a given situation.
In the context of The Merge, for example, Hayes believes that this phenomenon could drive up the price of Ethereum. This is due to the reflexive relationship between its price and its deflationary properties.
“If The Merge is a success, traders will buy ETH today, knowing that the higher the price, the more the network will grow. Therefore, the more deflationary it will become, driving up the price and causing the network to be used more and so on. This is a virtuous circle for the bulls.” said.
Also according to him, The Merge will usher in two major changes for Ethereum. First, it will change its consensus mechanism from proof-of-work to proof-of-stake. Second, it will reduce the ETH offer issuance fee by approximately 90%. Therefore, these factors, according to him, should be called “Triple Halving”.
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