Top-notch macro analyst and investor, Qiao Wang, dismissed some delusions about popular Ethereum (ETH) price catalysts and indicated the drivers that could really work.
Don't overestimate network usage
According to a tweetstorm by Mr. Wang, typically, network characteristics are seen as the main Ethereum (ETH) price drivers. Despite the fact that the Ethereum 'network effect' looks healthy enough to win in a smart contract war, it doesn't directly boost the price.
Instead of this, the two most obvious catalysts for the Ethereum (ETH) price for Mr. Qiao Wang include:
- Transition to Proof-of-Stake (ETH2);
- Fixing monetary policy
With a Proof-of-Stake roll-out, a huge share of Ethereum in the circulating supply will be locked by stakers. A stable yield from the validation processes is the direct motivation for people to buy and hold Ethereum (ETH).
Should this be accompanied by the proper monetary policy (not limited to partial fee burning), such progress would definitely attract people to Ethereum (ETH).
Waiting for Ethereum (ETH) 2.0
To properly evaluate the Ethereum (ETH) price catalysts, Mr. Wang recommends avoiding searching for a direct positive correlation between network usage and the price of its native asset. He calls this bias 'lethal mind virus' and remembered that Silver (XAG) isn't as valuable as Gold (XAU) despite much broader industrial usage.
According to the analyst, people need much more evidence that 'Ethereum is money' to start using it this way. Consequently, the Ether community just needs to wait for the roll-out of the Ethereum (ETH) 2.0 zero phase or Beacon Chain.
Despite not causing an immediate and splendidly bullish reaction, Mr. Wang insists that he doesn't foresee a major down move either.