Megan Kaspar, Magnetic Managing Director and Co-Founder joins the Yahoo Finance Live panel to discuss Ethereum reaching an all time high.
ZACK GUZMAN: I want to shift over to another thing. Speaking of space, to the moon has been where we’ve seen cryptos take off here in 2021. Not just Bitcoin, but Ethereum outpacing that. We’ve seen it hit a number of all-time highs here in the last couple of weeks. It’s up 378% year to date to Bitcoin’s 92% run on the year. To our next guest’s credit, though, she called that exactly right back in January when Ether was still around $1,100 per coin right here on this show. Take a listen to that.
MEGAN KASPAR: So Ethereum is definitely very undervalued. And I think if it breaks its all-time high of 1,400, we’ll see the price of Ethereum test the mid 3,000s. There’s a lot of value that’s going to come out of this chain. And it’s definitely being overlooked. And it’s misunderstood, I think, by a lot of investors that are just getting their feet wet to understand the ecosystem as a whole.
ZACK GUZMAN: Misunderstood and undervalued. So where do we go from here? Let’s bring her back in. Joining us is Megan Kaspar, Magnetic managing director and co-founder, back on the show. Megan, good to be chatting again. You called it, so, you know, we’re here in those mid 3,000 levels. So what’s next?
MEGAN KASPAR: Well, since January, we’ve had two major network announcements for upgrades on Ethereum, which are a part of the Ethereum 2.0 rollout. This will be the EPI 1159 in July. And then the shift from proof of work to proof of stake in November or December. These changes will make Ethereum’s transaction fee structure shift. These are going to be burnt. The asset itself will be deflationary. And there will be a negative inflation rate. We’ll also see the elimination of mining, which the shift of proof of stateful for block validation reduces carbon footprint by 99.9%, making Ethereum a green technology.
So these two updates on the network alone could push Ethereum to a trillion dollar market cap, which is where Bitcoin is at today. That would make Ethereum around $8,000 to $10,000 a coin. We’re seeing in the derivatives market for today and tomorrow, there’s about a strike price of 3,500. So this price could stay.
This could be a really good sign of an entry point to come into Ethereum now if you’re not already holding it. Because on May 14, we start to see those strike prices increase to about 4,000. This Tuesday, 9,000– $8,000 priced Ethereum derivatives contracts were purchased. And that expiry date is for June 25th. So the price is going to drastically increase as these shifts and changes happen to the network.
ZACK GUZMAN: Yeah, so, OK. So 8,000 to 10,000 your next levels there to watch here potentially by the end of the year. And now, you say, would be a good time to get in, despite the fact that we are at all-time highs. And just to kind of return to those points you’re making, maybe translated a bit more into things that non-crypto people might be able to understand. When we’re talking about mining and the way that proof of work works, people are confirming transactions. Those miners like Bitcoin take a lot of energy.
When you shift to proof of stake, people can stake their crypto, their Ethereum on the network. And it reduces kind of that energy demand, right? And we’ve heard that from a lot of institutional investors, Kevin O’Leary being one of them from “Shark Tank” talking about blood coins from China and how he doesn’t necessarily want to lean on Chinese mining here. How much more do these changes maybe attract institutional dollars on the margin? And how much is that a piece of your driving thesis to reach 8,000 to 10,000?
MEGAN KASPAR: I think 8,000 to 10,000 is just incorporating the shifts alone. Institutional investment coming into Ethereum could put Ethereum up to about 100,000 in the next few years. Institutions are mandating that they invest in clean green technologies. And that’s what Ethereum is becoming. Unfortunately, Bitcoin’s proof of work network will not be that, unless they choose to shift as well. So I think those things taken into calculation will drive the price drastically from an investment standpoint and thesis for institutions.
AKIKO FUJITA: Megan, we don’t want to put the pressure on you, but it is on, given that you got that first call right. Let’s talk about what you said about Bitcoin. Because back in January, you said you expected that level to hit 200,000 by the end of the year. Does that case still hold, or you think it can go even higher, given the price action over the last several months?
MEGAN KASPAR: Yeah, I think the price will still hit around 200,000 for Bitcoin. But I do, again, see a greater upside potential in return in Ethereum, even just from entry points today if you didn’t get in, in January. So I do think that this sort of bull market that we’re in for crypto is going to last, as a lot of paradigm shifts are being created with the technology.
ZACK GUZMAN: Yeah, we had Pantera Capital on yesterday, talking with Dan Morehead about his price calls on Bitcoin. He has 115,000 by August, using the stock to flow statistics there. When you back up, though, and look at maybe some of the other alt coins beyond Ethereum, what are you seeing in terms of the moves? Because even he was saying that if you are an investor in this space, you really have to diversify beyond the major coins in Ether and Bitcoin to catch that upside here, because that’s where he’s seeing the most action. I don’t know if you want to include Doge in there, too. But what are you seeing on that front?
MEGAN KASPAR: Yeah, in order to achieve the greatest alpha in the asset class, you do need diversification. And that would include other alt coins. We sort of see a trend in the cycle of alt coins that are gaining a lot of traction. First, we saw DeFi in late summer last year. Early this year, we’re seeing NFT chains [INAUDIBLE]. And then we saw a great increase around file sharing point BitTorrent and Filecoin. And now [INAUDIBLE] today BCH, Ethereum classic, and Doge. Again, Doge is just a [INAUDIBLE] of Litecoin. And yeah, Zack, as you– Doge is the most top performing crypto asset of this year.
AKIKO FUJITA: Megan, we heard from new SEC chair Gary Gensler weighing in on Bitcoin and potential regulation that’s coming. This morning, he said that he thinks there aren’t enough investor protections in place. And he sort of defined it as a speculative store of value. When you look at the comments that have come from the SEC so far, in terms of how they’re looking at regulation, has that risk shifted at all for you in terms of the regulatory headwinds that could come?
MEGAN KASPAR: No, I don’t think so. I think that this asset class, in and of itself, is a representation of a new wave of finance that’s coming. And just like with any investment, I see this asset class as sort of early stage investing at this point, until all assets are tokenized. Eventually the stock market will be tokenized presumably on the Ethereum blockchain.
AKIKO FUJITA: Megan Kaspar, Magnetic managing director and co-founder, appreciate your time today.