Following the hint of recovery seen in the cryptocurrency market since the mid-June bottom, digital currencies pulled back sharply on Friday, along with the stock market.
Pal Roots for Cryptos: Former Goldman Sachs executive and macroeconomic expert Raoul Pal, however, is not too worried about the weakness. “Ah, the old cheeky pre-merger crypto shakeout I see…,” the economists said.
Ethereum ETH/USD is about to undergo the most significant upgrade in its history, called the Ethereum Merge, which is expected on September 1[ads1]5. This represents the merging 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 Ethereum remains the “safest, easiest allocation,” and expects demand shocks for the crypto, Dailyhodl reported. He sees increased demand from institutional investors.
See also: How to buy Bitcoin (BTC)
Time for accumulation: New lows are unlikely, he said, apparently suggesting the crypto market may not pull back all the way to mid-June lows. He most likely sees it as a “quick-check drop.”
If all the cryptos hit new lows, Pal said he would continue to add. He reasoned that the two-year risk/reward becomes “really attractive.”
“50% downside vs possible 10x upside = 20:1 R/R,” Pal said.
Ah, the old cheeky pre-merger crypto shakeout I see… I don’t expect new lows, but most likely a quick fall for gut check, but let’s see.
New lows = keep adding (for me) as 2-year risk/reward becomes very, very attractive
— Raoul Pal (@RaoulGMI) 19 August 2022
At last check, Bitcoin BTC/USD fell 0.89% to $21,263.41 and Ethereum fell a steeper 5.12% to $1,622.10, according to Benzinga Pro data.
Photo: Courtesy of CoinDesk on Flickr