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Arthur Hayes predicts Ethereum will reach $5K after merge if Fed pivots

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BitMEX founder Arthur Hayes predicted that the price of Ethereum (ETH) could rise to $5,000 if the merger upgrade is successful and the Federal Reserve continues its pivot.

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Hayes also revealed that Ethereum’s current price represents a huge buying opportunity for investors as it trades 76% below its model price of $2,815.

Ether up to $5,000

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In an Aug. 5 message, Hayes said the Fed’s move to “support growth rather than fight inflation” would lead to an increase in quantity, a situation where the Feds would have to print more money to support the economy.

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In this scenario, when the Ethereum Merge eventually happens in September, he believes that the digital asset will be able to break the $5,000 mark as it becomes a deflationary asset with high demand.

The rate of issuance of Ether per year will be reduced by ~90% under the new PoS model…the ether decommissioned will only increase as the network grows in popularity…all these factors together should still push the price of ether exponentially.

No Fed Reversal + Successful Ethereum Merger

Hayes believes that with the Fed backtracking on its decision to support growth by printing more money, the merger could still lift the price of Ethereum to $3,562.

According to Hayes, the merger is expected to result in a “triple halving event” for Ethereum. Since the price of Bitcoin (BTC) has always reacted positively to its halving, we can expect the price of ETH to react in a similar way.

Other predictions

Hayes continued that if the Ethereum merger fails or is suspended and the Fed changes its policy, it will not have any negative impact on the asset price as it will still be able to maintain the current $1,600 level.

However, several people were left disappointed by the broken promises.

Explaining how he arrived at his $1,600 prediction, Hayes said that Ethereum would have gained 1.72% had it not been for the merger excitement between June 17 and July 26.

Thus, if the merger fails, the price will drop to $1,099. But since there will be more liquidity from the Fed’s pivot, he expects ETH to eventually rise, as it did between March 2020 and 2021 when “the Fed will increase the money supply again.”

Meanwhile, in a scenario without a Fed reversal and a failed Ethereum merge, Hayes predicted that ETH would likely return to its July 17 low of $1,081.

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