The CEO of BitMEX, Arthur Hayes, has said that “Ethereum is a double-digit shitcoin“. He predicts that it will fall below USD 100 when everyone decides to sell all at once.
Ethereum is already on an extreme downtrend, having dropped from USD 1,400 to less than USD 260, before bouncing back up slightly to USD 290 as of this writing on 16 August 2018. Bitcoin has declined sharply too in the same time from USD 20,000 to USD 6,400, but this is a 68% drop versus Ethereum’s 79% drop.
BitMEX, the largest crypto derivatives exchange in the world with USD billions of trading volume per day, listed Ethereum contracts two weeks ago. These are perpetual swap contracts that exchange Ethereum derivatives for USD, similar to the most popular Bitcoin derivatives product on BitMEX. Currently, the daily volume on BitMEX is ETH 800,000, about USD 250 million. This is nearly on par with Binance’s and Bitfinex’s ETH 1 million of combined trading volume during the same time. Perhaps BitMEX is on track to become the largest Ethereum exchange in the world, although once again this is a derivatives market and not physical cryptocurrency.
The timing of Ethereum being listed on BitMEX and the sharp decrease in its price might not be a coincidence. Ethereum was steady near USD 470 prior to the listing and has dropped nearly 40% since trading started on BitMEX. The possible connection is that BitMEX offers short selling and leveraging, allowing traders to make bets that Ethereum will drop and then multiply those bets. The end result is a massive amount of bets that Ethereum’s price will drop and then it did drop, so these short sellers made huge profits.
The fact that the CEO of BitMEX is now saying Ethereum is going to drop below USD 100 suggests that traders on BitMEX will maximize short selling Ethereum, which could make this a self-fulfilling prophecy. The Ethereum market is smaller than the Bitcoin market and easier to manipulate, and BitMEX is sizable enough that it has definitely influenced Bitcoin’s global price. The quarter-billion USD of Ethereum volume on BitMEX per day is only a small taste of what BitMEX is capable of.
The CEO of BitMEX speculates all the venture capitalists will sell at the same time. The huge amount of short selling on BitMEX has the potential to initiate, accelerate, and propagate the crash of Ethereum. Of course, BitMEX traders can go long on Ethereum too and bet that it will rise, but with the CEO of BitMEX calling for sub-USD 100 prices, that is less likely.
Follow BitcoinNews.com on Twitter at https://twitter.com/bitcoinnewscom
Telegram Alerts from BitcoinNews.com at https://t.me/bconews
Image Courtesy: Pixabay
The post BitMEX CEO Dismisses Ethereum as “Double Digit Shitcoin” appeared first on BitcoinNews.com.