BitMex CEO Arthur Hayes Says Ethereum (ETH) Is A ‘Sh*tcoin’
The CEO of BitMex Arthur Hayes has unreservedly called out ETH as a "double-digit shitcoin". He believes it's a matter of time before the price of the second largest cryptocurrency by market capitalization hits the abyss by sinking below $100.
The cryptocurrency market is attempting to recover from this week’s price decline, with most top coins trading in the green over both the daily and weekly charts. The weekend may see most coins recoup losses suffered over the week.
There is optimism, especially for Bitcoin after it bounced from a new low. However, the Ethereum community may be having a different feeling altogether.
The CEO of BitMex Arthur Hayes has unreservedly called out ETH as a “double-digit shitcoin”. He believes it’s a matter of time before the price of the second largest cryptocurrency by market capitalization hits the abyss by sinking below $100.
Hayes made the bold claim via Crypto Trader Digest, a Bitmex publication. He argued that Ethereum’s price was basically anchored by the 2017 initial coin offering (ICO) boom.
He states that most of the investment in these projects is from venture capitals (VCs), most of which will dump their holdings if the bearish market sustains. For that reason, he believes Ether will tank big time.
Ethereum in the market
The blast by the unassuming Bitcoin bull may be dismissed by some. It would not be out of line to do so. However, it should be noted that Ethereum is actually down nearly 80 percent since the beginning of the year.
Ether traded at a low of $254 earlier this week, having hit a high of over $1,400 in January this year. The last time the coin traded near this value was in September 2017.
ETH/USD has recovered by about 2.5 percent to see its value hit over $310 today. It is possible then that Ethereum may surge to move away from the clearly bearish zone.
What could go wrong?
According to Hayes, a veteran Wall Street investor, and former Citi Group trader, all that could go wrong for Ethereum will come from venture capitalists.
It is these VCs that poured huge funds into ETH during the ICO boom. He says that it could have worked in 2017. But most of these hedge funds could be preparing for an exit.
He says that traditional Venture Capitalists used their funds poorly, investing in the same projects as everyone else, thinking they ‘got it’.
For now, these poorly organized funds are desperate to find a way out.
“They don’t have the mental strength to cut positions to limit further losses, or back up the truck and buy opportune dips even though they are down,” Hayes explained.
According to him, these VC investors will all pull the plug and decide to liquidate their positions in one big swoop.
“If you don’t sell, and the market continues falling, you lose your job. So everyone sells simultaneously.”
Many analysts have predicted that most of the digital assets will disappear, with less than five percent surviving. Whether Ethereum survives or disappears will likely depend on the events surrounding the ICO and VC market.
At the moment though, Ethereum remains the number two coin with a market cap of 31.2 billion.