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Analysts at investment management firm ARK Invest said Ethereum (ethereum) could start gaining more bullish momentum as the crypto markets return to a risk-on environment.
In a new interview on the For Your Innovation podcast, ARK analyst Frank Downing said: To tell After months of bearish price action, the dust is settling in the cryptocurrency market.
I think we saw something interesting last month when the market was headed down and in this kind of yield cycle. Assets aren’t necessarily trading on fundamentals, but the market is completely risk-off.
Just in the second half of July, I think that started to change.We saw the market starting to trade more on the margins and gradually on the fundamentals. ”
A risk-off environment generally refers to a period of time when riskier assets such as cryptocurrencies and stocks are sold while safer assets such as the US dollar are prioritized.
Downing then makes a bullish case for Ethereum centered around the highly anticipated transition from a proof-of-work consensus mechanism to a proof-of-stake mechanism due in mid-September. .
In the case of ETH, this was mostly about the transition, moving the network to proof-of-stake consensus, a development called The Merge. But the day when the transition actually happens is closer than ever…
[The latest testnet] It shows the promise that The Merge will actually happen, the fact that so many parties have taken this technical and execution risk in the past, and the changes to ETH’s tokennomics that have reduced token issuance, proof and I showed a story about Proof of Stake consensus in comparison. of-work has generated a lot of interest in buying ETH as a token.
So we see the ETH/BTC pair, or the price of ETH against Bitcoin, outperforming. This is a deviation from the risk-off period we have seen so far. So relatively [the] The market is back to risk-on for these types of assets. “
According to Downing, Ethereum’s strength is a net positive for the long-term health of the digital asset space.
This is what we would like to see, a long-term trend of increasing ETH value relative to Bitcoin as a sign of the growing strength of the entire crypto ecosystem.
If you look at what we classify as the financial and internet revolution compared to the monetary revolution embodied by Bitcoin, it accounts for about 50% of the crypto market and ETH is the dominant asset within that bucket. So seeing this strength is bullish for the cryptocurrency as a whole. ”
Ethereum is trading at $1,480 at the time of writing, down 5.6% on the day.
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