Ethereum is close to all-time highs. Will it benefit from rising inflation❓
Cryptocurrencies had a relatively benign weekend with Bitcoin and Ethereum seeing only a limited volatility and Dogecoin giving up some of the recent gains. So far this can be seen just a consolidation after a strong rally driven by recent, first Bitcoin futures centered euphoria. While some market participants could wonder if this is a top, Goldman Sachs analysts definitely do not think so. As Zerohedge reported, Goldman sees Ethereum prices rising nearly 100%... within the next 2 months!
Can Ethereum rise to $8000 purely on inflation expectations? Source: Zerohedge
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Create account Try a demo Download mobile app Download mobile appThe argument goes that ETH have seen a strong correlation with inflation expectations in the US (here measured by 2Y2Y forward) and as these expectations move higher, ETH has been left behind lately. Goldman argues that merely catching up to expectations could send Ethereum prices to $8000.
One may counter that inflation expectations along with many risky asset classes (including crypto but also stocks) have seen correlation driven by economic variables – they all tumbled during the pandemic slump and recovered afterwards on the FOMC policies. However, one point is valid – looking either at Bitcoin or Ethereum we do not see exponential day-to-day gains that occurred right before large corrections in the past.
Ethereum price gains are not as sharp as during the spring or the summer rally. The bullish argument is that this could make this rally more sustainable. Source: xStation5
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