Macro investor bullish: Ethereum’s price growth looks like bitcoin’s in 2016-2017
Ethereum has undergone a remarkable rally in the last seven days. According to market data, the cryptocurrency has gained 65 per cent in the last seven days and over 100 per cent in the last month.
According to macro investor Raoul Pal, the current CEO of Real Vision and former head of Goldman Sachs‘ hedge fund distribution business in Europe, Ethereum is by Bitcoin Era likely to grow even faster in the coming months.
Pal believes the cryptocurrency is on a similar path as Bitcoin was in 2016 and 2017.
Ethereum on a similar path to Bitcoin?
As Ethereum begins to overtake Bitcoin in this latest leg up, analysts are wondering if the idea of ETH surpassing BTC in this market cycle is realistic.
According to Raoul Pal, it is likely that this will happen.
He recently shared the chart below from his firm Global Macro Investor. According to it, Ethereum is structurally likely to follow the general trajectory that Bitcoin took from 2013 to 2019.
This fractal analysis predicts that Ethereum is likely to gain 2,000 per cent in the coming market cycle, which would mean a price of $20,000. Pal on this:
„Ooops… ETH looks just like BTC – Metcalfe’s Law seems to be the key to the price of both ETH and BTC… Yes, ETH could well rise to $20,000 in this cycle… (just like BTC in the last cycle, by market cap ETH will be bigger).“
At $20,000 per coin, Ethereum’s market cap would likely surpass Bitcoin’s – assuming BTC only grows by 300-400 percent in this market cycle.
Is this realistic?
While this prediction is based solely on pure statistics and charts, Pal has noted that there is a fundamental reason to believe that Ethereum will outperform Bitcoin in this market cycle.
According to Pal, while Bitcoin may be the base money or store of value in a future world of fintechs – Ethereum is the layer where transactions are settled and applications are built:
„My guess is that BTC is a perfect security layer, but ETH could have a larger market capitalisation in 10 years for the reasons mentioned above. Money and collateral are just the base layer. Everything is built on top of that. The store of value is the security, the trust layer and the exchange of value is bigger.“
To translate this into real life terms: There is an estimated $19 trillion worth of M2 money in the US today. That may sound like a lot, but trillions of dollars worth of derivatives are currently built on top of that capital base.
Pal believes that this fact alone could give Ethereum (Go to Buy Ethereum Guide) a higher market capitalisation than Bitcoin in the coming years.