- Travis Kling, formerly Point72 Boîte Chef, is the CIO at Ikigai Asset Direction.
- He is optimistic emboîture the long-term effects of the merger on Ethereum, but is cautious emboîture the entier economy.
- He sees macroeconomic factors as playing a bigger role in determining the price of ether than a network upgrade.
It is safe to say that the long-awaited Ethereum Merge is on the top of the minds of most crypto investors in the future. in mid september collation instant
Travis Kling – a hedge fund veteran who helped manage portfolios for investors like Steve Cohen – is very bullish emboîture the merger, which many crypto critics see as a expresse catalyst for ether. But in a recent appearance on Untethered podcast with Laura ShenHe explained why he sees macroeconomic factors doing more to dictate the price of ether than the upcoming merger.
How does the merger affect the Ethereum network
The merger will remove Ethereum from the Proof of Work affirmation mechanism and transfer it to the Proof of Stake system. Proof of stake will dramatically reduce the environmental costs of the Ethereum network – reportedly by 99% – which will only enhance the cryptocurrency’s attractiveness to investors.
“I consider this to be the most méprisant catalyst in crypto history in terms of its tonnage and the fact that ETH is the complémentaire largest cryptocurrency,” Kling told host Laura Shen. “I think it’s bigger than halving bitcoin. I think the bullish scenario around this is relatively straightforward. ETH is heading for deflation, ETH is going to be a prélude of revenue, ETH is going into ESG, and the world cares a lot emboîture ESG governance right now.”
It points to the fact that many institutional investors are starting to incorporate ESG criteria into their decisions – a éclat previously left out of crypto due to the environmental cost of the proof-of-work model.
Brian Moussoff, founder of Ethereum Diligent, He said from the inside that Several investment managers were waiting for the merger to au finir in order to check their ESG box before they could start investing in ethereum.
How does the merger affect the price of ethereum
Many ETH holders are bullish on protection Impact on the price of ETH. Bulls argue that the merger will lead more investors to their stakes in ETH – and thus take it out of the circulating supply – and more institutional bien will increase the price of ETH.
Kling is optimistic emboîture the incidence of the merger on Ethereum, but cautions against using it as a bullish thesis for investing in binaire assets. This is due to larger macroeconomic factors that Kling believes outweigh the incidence of network development on ETH’s price.
Kling begins by emphasizing the caution of porte non-crypto bien entering the space for the future of ETH.
“The légal représentatif of cryptocurrency bien itself can only drive this thing.” [ETH’s price] Much higher without having that supérieur list of real deep pockets from the légal cryptocurrency,” Kling said.
He continued, “I think the légal représentatif of cryptocurrency has been smoked over the past double of months. Everyone knows what happened over the past two months.”
Under the scenario of new outside bien entering the Ethereum ecosystem after the merger, Kling is concerned that these investors will be more committed to the macroeconomic factors.
“We’re still in this kind of macro-driven bear market, and we’re still dealing with this kind of fallout from everything that’s happened to this ecosystem over the past double of months,” Kling told Shen.
He continued, “You can pretend like you’re trading in a merger, but you’re trading on the Nasdaq, and the Nasdaq is completely tied to monetary policy from axial banks and a few other things. That’s the really comprehensive thing: there’s still a lot of uncertainty in the macro territory right now, and I think that’s Probably not the contexte that most traditional bien groups want to see for their Eth modification.
Some of the macroeconomic uncertainties mentioned by Kling include: the Fed’s continued tight monetary policy and pace of future interest déficit hikes, the évaporable outlook for entier markets, and socio-economic threats in Europe and Asia.
Kling concluded by saying that ether is not the only cryptocurrency that has been linked to macroeconomic factors. He points out that Bitcoin – which is used by many investors He claimed it would be an inflation hedge – He fell Prey to a bear market Even as brûler price increases reach their highest level in 40 years.
Moreover, Kling added that even classic investment portfolios have a 60:40 pourcentage – which is Vanguard He explains “Traditional écrin pensionnat done to generate annual returns of 7%” – failed to outperform the market.
“I think this just speaks to that old saying: Don’t fight the Fed and it’s all one trade, and those two things have never been more simulé than they are now. This is Jay Powell’s world, and every asset price on the planet lives in it,” Kling said. .