Bloomberg strategist: Etherium switch to PoS will give the second cryptocurrency a big boost

Bloomberg stock strategist Mike McGlone shared on Twitter his expectations for the future of the world's second cryptocurrency, Etherium. According to his assumptions, the transition of Etherium to the Proof of Stake protocol model, although it did not immediately affect the growth of the coin, but in the future it will be able to create a strong deflation, attract a lot of money from institutional investors and thereby increase its value.

As of October 25, the Ether price is about 70% lower than during the peak of 2021. But it is about four times higher than the 2020 average. This speaks to the inherent volatility of an emerging asset and technology with a common premise for drawdowns that most often follow record highs.

In addition, Mike McGlone noted on his Twitter that not only its deflationary model and the transition to Proof of Stake, but also the developers’ commitment to creating DeFi applications on Vitaly Buterin’s blockchain can influence the popularization of Etherium. Among other things, it is Etherium smart contracts that are used in the banking and financial sectors, which can also serve as an additional reason for the growth in popularity.

On October 26, the Etherium exchange rate for the first time after switching to the Proof of Stake algorithm crossed the threshold of $1,500. If you believe the data of CoinShares analysts, then leaving Proof of Work has not yet increased the inflow of investments and all funds are traded mainly among those traders and investors who already had an interest in the world's second cryptocurrency.

Many analysts predicted a positive trend for Etherium after its merger, however, despite this, ETH continued to fall even after switching to a new algorithm. Mike McGlone believes that good news awaits Bitcoin as well. Thanks to the increase in interest rates by central banks, the first cryptocurrency in the world can overtake many traditional types of assets in popularity.