Former BitMex CEO Arthur Hayes tweeted about an exciting discovery he made regarding the current timing structure of Ethereum futures.
He noted that the curve is in backwardation and futures are below the spot price through January 23. In his opinion, this is because investors are reducing their positions in ETH in anticipation of the upcoming merger.
The former BitMex head added that if margin pressure comes from sellers, market makers are likely to buy futures and will have to sell spot to protect themselves from potential losses. As a result, there will be further downward price pressure in the cash or spot market.
When the pressure is on the buyers’ side, the market makers who open futures shorts are forced to open long positions. This is a reversal of the positions they had before the Merger.
According to Hayes, if all goes according to plan on September 15, a positive feedback loop will be created, which will lead to higher spot prices.
Recall that just a few days ago, Hayes speculated that the price of Ethereum could reach $5,000 if the “Merger” update is implemented successfully and the Federal Reserve prioritizes economic growth over curbing inflation. This would require an increase in the money supply and force the central bank to create more money to keep the economy afloat.
The rate at which the ether is released per year would be reduced by about 90% under the new PoS model…The ether taken out of circulation would only increase as the network grows in popularity,” Hayes believes. – Together, these factors should increase the price of ether exponentially.