BitMEX CEO Arthur Hayes: Ether Will 'Test' $200 When ICOs 'Return'

Omar Faridi
  • BitMEX CEO Arthur Hayes has predicted that ether (ETH) price will "rebound aggressively."
  • Hayes believes ether's price will recover once the initial coin offering (ICO) market comes back in the next 18 months.

Arthur Hayes, the co-founder and CEO of BitMEX, the world’s largest cryptocurrency derivatives trading platform, recently predicted that the price of Ethereum’s native token, ether (ETH), will “rebound aggressively.”

Hayes, who previously worked at Deutsche Bank and as head trader at Citi, told Cointelegraph Japan that the main use case for Ethereum is to use its blockchain network to launch initial coin offerings (ICOs). However, Hayes noted that the ICO market is “dead” right now and that it will likely return within “18 months.”

Hayes: Ether Could “Quickly Test” $200

Explaining how the price of ether could recover, the Wharton Business school graduate remarked:

The use case for Ether is primarily ICOs. That market is dead right now … Once there are new issues (ICOs), then ether will rebound aggressively. When the ICO market returns, ether will quickly test $200. The timing of the ICO rebirth is 12 to 18 months out.

As CryptoGlobe reported in mid-August, Hayes called ether a “shitcoin” as its price had mostly been pumped by speculative venture capitalists and ICO projects. At the time, ether’s price dropped below the $300 mark and Hayes said the companies and inexperienced investors that invested in the cryptocurrency and/or ERC-20 tokens would likely dump their holdings as they would not be able to stomach more losses.

Notably, the price of ETH has since dropped below $100 as Hayes predicted it would, but has now recovered and the token is trading at around $130.

Security Tokens & Stablecoins

In his recent interview, Hayes also predicted that stablecoins will be dominating the cryptoasset markets before the ICO market comes back (in the next 12-18 months). The BitMEX co-founder noted:

Security tokens and stablecoins will prove attractive sirens for investors in 2019. While their fundamental raison d'etre is flawed, investors in this time of pain will latch onto anything they believe will be their ticket to easy riches.

As covered by CryptoGlobe in November, Asher Tan, the founder of Australia-based crypto exchange, Coinjar, has predicted that stablecoins would be the “next big thing.” Tan, who launched Coinjar in 2013 along with computer scientist Ryan Zhou remarked:

The interesting thing right now, what's on everyone's lips … [are] stablecoins … It's a craze right now … It helps you transfer money around the crypto ecosystem at a stable rate. But there's a whole lot of applications or use-cases that could come out of it.

Tan also revealed there are now an increasing number of software engineers, economists, and traditional investors who have started to take more interest in stablecoins. Commenting on active involvement of a relatively large number of players in the development of USD-pegged coins, Tan noted "these are things that usually only a central bank would have thought about five years ago, and now you've got tech start-ups looking at economics, and how can you peg a currency to a token."

Seven Major Trends in the Cryptoasset Industry, According to ConsenSys

ConsenSys, a Brooklyn, New York-based organization that builds, consults, and deploys decentralized applications using Ethereum, has revealed that 78% of firms use open-source software. However, the OpenSSL Software Foundation, which develops transport protocols for establishing secure connections between clients and servers, “operates on a budget of less than $2,000 in donations” and less than $1 million of revenue from contract work each year.

Web 3.0 Development Will Mostly Be Open-Sourced, But “Not Free”

As confirmed by ConsenSys, open-source projects like OpenSSL Software and also open-source blockchain and crypto-related initiatives are, for the most part, operating on relatively low budgets due to lack of adequate funding.

Although the management at ConsenSys believes Web 3.0, an evolving set of protocols and standards for the new internet, will be created mainly through open-source development projects, it also noted that the world wide web of the future will not be developed “for free.”

On May 11, 2019, Ethereum co-founders Vitalik Buterin and Joseph Lubin announced they had donated 1,000 ether (each) to Moloch DAO, an initiative aimed at acquiring funding for the ongoing development of Ethereum’s open-source ecosystem.

“Cryptoassets Are A Hedge Against Irresponsibility”

According to ConsenSys’ developers, the “systems of the future will be antifragile.” Commenting on the fragility of Bitcoin (BTC) and other cryptocurrencies, Travis Kling, the Founder and Chief Investment Officer at Ikigai Asset Management, has said: 

 

[Cryptoassets] are a hedge against irresponsibility from governments and central bankers…the world is waking up to the value of a hedge against quantitative easing.

 

Zero-Knowledge Proof Tech Could Solve Ethereum’s “Privacy Paradox”

ZCash’s zk-SNARKS technology, based on zero-knowledge proofs, may solve Ethereum’s “privacy paradox.” As noted in ConsenSys’ blog post, zero-knowledge proof technology could help address the “challenge of reconciling the blockchain’s transparency (for validating transactions) with the need for data privacy and confidential transactions.”

Back in September of 2018, Buterin said zk-SNARKS could be added to Ethereum to help the smart contract platform scale to handle around 500 transactions per second (TPS).

Decentralized Finance (DeFi) Is “The Leading Narrative”

As mentioned in ConsenSys' post, decentralized finance (DeFi) is “one of the most resounding narratives” in the cryptoasset industry. Indeed, there are currently over half a billion dollars locked into contracts issued by leading DeFi protocols including MakerDAO, Compound, Dharma, Uniswap, and Bancor.

DeFi’s main value proposition is allowing investors to access relatively large liquidity pools in a decentralized, or peer-to-peer (P2P), manner - without requiring a trusted third-party.

Regulators Continue To “Join The Conversation”

According to ConsenSys, the blockchain industry has seen increased involvement from regulatory authorities throughout the world. Notably, US Representative Tom Emmer has recommended a bill, referred to as Safe Harbor for Taxpayers with Forked Assets.

Emmer’s bill suggests that the US Internal Revenue Service (IRS) not penalize taxpayers who have not reported capital gains made on forked cryptocurrencies - until the IRS provides clear regulatory guidelines for such digital assets.

Enterprise Blockchain Projects Leading Business Innovation

Another emerging trend, in the crypto ecosystem, is the recent launch of a large number of projects aimed at enterprise blockchain development. Tech giant Microsoft, for example, released a software development kit for blockchain development for the public Ethereum network and Quorum.

Tokenization Will Help Create “Enormous Value"

As cryptocurrency fundraising models move increasingly towards security token offerings (STOs), ConsenSys’ team believes the blockchain ecosystem is “bridging open-source technology with regulated capital.” According to ConsenSys, this may be a “positive step” which may also help in bringing more transparency to the traditional financial sector.

ConsenSys’ blog stated:

 

The next wave of financial products, such as derivatives and equity and debt securities, will be the method in which blockchain finally moves beyond payment settlement.

 

The blog post further noted: 

 

Tokenization as a whole presents blue ocean markets that will create enormous value that will continue to drive the ecosystem forward. Blue ocean markets are new, uncontested market spaces that result in a positive sum game, as opposed to highly competitive red ocean markets that are often zero-sum (someone has to lose for others to win).