macro investment strategist Lynn Aldentalked about an overlooked factor that could catalyze the rise of Ethereum (ETH) in 2022.
Speaking in a new interview on his YouTube channel Investing Made Simple, Alden said that he was locked in the Ethereum 2.0 staking contract. Ethereum (ETH) He explained why the amount serves as a bullish indicator for the second-largest crypto asset by market cap.
“What I am watching is the Ethereum lockdown contract. They launched Beacon Chain about a year ago and they are doing this staking contract and this contract is one way. Once you lock the coins, they will stay there until something changes or merging occurs. The other thing I’m looking at is that Bitcoin is coming out of the exchanges pretty fast, but Ethereum is coming out a little slower than the exchanges, which is partly because they’re contracting.
Basically, you have an illiquid supply formation, and as far as that goes, it’s a pretty strong bullish variable. I mean, this contract has over 8 million ETH. I think we’re approaching 9 million. I haven’t been able to control it for a few weeks and overall I see it as a bullish catalyst.”
Distributor ledger explorer Etherscan shows that crypto investors have locked 8,793,458 ETH worth $35.43 billion in the smart contract. Those who invest their ETH in the smart contract are trying to become validators of the next iteration of Ethereum.
However, the investment strategist also noted that Ethereum could see a sell-off event once the trapped ETH tokens are unlocked.
“I think once this is consolidated and unlocked, it can be a major liquidity event. Some of these coins have pretty big profits and some people might want to take the profits off the table so I’ll be more uncertain after the merge. Ironically, he may be one of those selling news events with a lot of anticipation, and maybe that’s some kind of catalyst to cool off for a while.”
Consolidation is a highly anticipated event for Ethereum as the upgrade represents the transition to a proof-of-stake consensus mechanism. The event is expected to take place in the 1st or 2nd quarter of 2022.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.