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."

Ethereum's Developers Decide to Implement ProgPoW on the Platform's Blockchain

Developers of Ethereum (ETH), the world’s largest platform for creating decentralized applications (dApps), have reportedly decided to move forward with their plans to implement programmatic proof-of-work (ProgPoW).

As described on its official Github page, ProgPoW is being developed to “close the efficiency gap available to specialized ASICs.” In order to allow all miners a (near) equal opportunity to mine ETH, ProgPoW is being designed in a manner that is “pre-tuned for the most common hardware utilized” on the Ethereum blockchain.

Owners Of Expensive Hardware Should Not Have An Advantage 

As noted in the technical documentation related to ProgPoW, there have been many different variations of Bitcoin’s (BTC) proof-of-work (PoW) which have been developed and implemented on various crypto networks. Many of these PoW variants are designed to be “ASIC-resistant,” meaning that the owners of expensive and highly powerful computing hardware may not have a significant advantage over other miners who may be using less powerful hardware to validate transactions on the same blockchain network.

In a bi-weekly meeting conducted by some of Ethereum’s main developers (on March 15th), it was decided (by the majority) that ProgPoW should be activated as part of the Ethereum network’s consensus protocol.

Ethereum's Community Had Also Decided Previously To Activate ProgPoW

During the meeting, the leading smart contract platform’s developers discussed whether ProgPoW would actually be effective at making ether mining more ASIC resistant. Greg Colvin, a developer and advisor for the Ethereum project, confirmed that the blockchain network’s community has had doubts regarding whether to integrate ProgPoW.

Colvin also revealed: 

We’re going back to stuff we were tired of talking about months ago. We decided that the only issue is whether there were errors in the algorithm, backdoors in the algorithm, anything like that. [...] Not arguments between the GPU people and the ASIC people. That will unroll over time.

Prominent Crypto Investor Argues ProgPoW Will Be Ineffective

In January 2019, Ethereum’s developers had reportedly reached consensus that they would implement ProgPoW on Ethereum’s mainnet. However, the exact date, or timeframe, for when ProgPoW would be activated has not yet been announced. In order to reduce the chances of potential vulnerabilities (or software glitches) when adding ProgPoW’s scripts to Ethereum’s codebase, the platform’s community had decided to have the new consensus algorithm audited by a third-party security company.

Notably, Ethereum’s investors have almost unanimously voted in favor of integrating ProgPoW on the world’s most dominant dApp development platform.

On March 11th, Dovey Wan, a founding partner at Primitive Ventures (a VC firm that has invested in Dfinity (“the world computer”), zcash (ZEC), and various other projects, had published a blog post in which she had argued that ProgPoW would be ineffective at (ultimately) achieving a greater level of decentralization on the Ethereum network. According to Wan’s post, several Ethereum developers had acknowledged that the ProgPoW algorithm might need to be modified further in order to function as intended.