If you ask Lex Sokolin, ConsenSys’ chief economist, Bitcoin’s woes aren’t over yet. Inflation is still much higher than central banks had hoped, central bank interest rates are still rising and Bitcoin is struggling to rise above its current price.
What is going on?
Ultimately, analysts are looking for data and information that indicates that a trend change is taking place. If you ask Sokolin, that is not the case at the moment. “I don’t see a dramatic change in the market regime. We still have sticky inflation and central banks are committed to raising interest rates until they cool down. This means that tech stocks and crypto assets will continue to trade around current prices.” thus the analyst.
Sokolin expects institutional investors to wait for more clarity from lawmakers before jumping in. At the moment, many crypto companies are being targeted by the regulators, especially in the United States.
For example, how about the Securities and Exchange Commission (SEC) attacks on Paxos for the Binance USD stablecoin and Kraken for their staking program. The good news, according to Sokolin, is that most of the bad guys will have been pushed out of the market by 2022 (FTX and Terra).
Positive on Ethereum
What is striking is that Sokolin sees the arrival of the Shanghai upgrade as a positive development for the Ethereum price. At the moment it is not yet possible to unstake Ethereum from the Proof-of-Stake blockchain.
With the arrival of Shanghai, that will soon be possible. Currently, about $28 billion worth of Ether is tied up in the Proof-of-Stake blockchain. So you would say that this could potentially have a significant negative impact on the price.
Sokolin doesn’t see it that way, at least not in the long run. According to the analyst, this makes staking Ethereum a lot less risky. After all, investors can untie and sell the Ethers whenever they want.
