Ethereum will introduce something magical after the merger, says Macro Guru Raoul Pal – Here’s what he means

Real Vision CEO Raoul Pal says Ethereum (ETH)’s transition to proof-of-stake will bring something “magical” to the top smart contract platform.

In a new interview on Real Vision Crypto, the macro guru says investors will flock to Ethereum after its transition as yield will be introduced into the protocol.

Pal notes that this is particularly exciting for the crypto industry, as ETH is also expected to see a supply shock due to mining obsolescence in a proof-of-stake consensus mechanism.

“After the merger, certain things happen. There are no miners to sell every day, it’s about six billion that disappear from sale every month. Well, that’s a difference.

Then we have the reduction in supply, but it’s really due to increased network activity. We have to see the network grow a lot for that to really happen. It becomes deflationary but it is less inflationary. There is less Ether but we have this magic.

The magic is that you have introduced the yield into the ecosystem in a secure way, so this is going to attract new people to the ecosystem who want to get ETH for the yield.

According to Pal, the combination of rising demand and falling supply means next year should be a good one for the digital asset industry.

“You have a demand shock, also the lack of ESG [environmental, social, and governance] restrictions people have with bitcoin, wrongly, but I understand that’s the mandate people have.

So you have frustrated people who want to invest but can’t because of ESG and Bitcoin, they’re waiting [the ETH merge] to arrive so ETH now has a yield… you have this technological asset which represents a great exciting future with a yield [and] a limited supply and a changing macro.

To me, that suggests the next 12 months [will] will likely be very good for digital assets.

ETH is changing hands for $1,616 at the time of writing, a decline of 7.5% on the day.

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