- Joshua Fernando is the CEO and co-founder of blockchain startup eCarbon.
- The 24-year-old exec explains why traditional equities are strongly correlated with major cryptos.
- Ethereum is up 42% in the past month, currently trading near $1,632.
Many investors jumped into ethereum when it neared all-time highs of $4,847.54 last year. Joshua Fernando, a former S&P Global senior associate and derivatives trader, had jumped in at $45 in 2016 – as it started a 10,672.31% ride up to its record price.
Like most people, Fernando was skeptical of ethereum when he first heard about it. His older cousin poured his savings into ether and once the investment doubled, the 24-year-old considered allocating as well. Fernando says he sold his ethereum once he achieved 20% returns, adding that as a professional trader his “risk tolerance is extremely low.” But he later bought back in and has continued investing via dollar-cost averaging ever since.
Years later, Fernando sees more long-term potential than ever in the layer-1, even starting eCarbon – a blockchain company focused on environmental products. The co-founder predicts that ether, which was trading near $1,632.45 on Thursday, won’t hit $5,000 until at least 2024.
This is a change of tune, however, from excitable crypto executives and firms who have called for crypto prices to rise at exponential rates. In a survey conducted by Finder, some fintech experts predicted that ether could notch over $50,000 by 2030. Antoni Trenchev, a cofounder of crypto lender Nexo, told CNBC that bitcoin may also hit $100,000 “within 12 months.”
A high correlation to traditional equities
A lot of Fernando’s prediction boils down to macroeconomic factors; he says ethereum won’t begin to fully recover from its slump until traditional markets do. As the Federal Reserve vows to crush inflation with interest rate hikes, investors are wary of speculative bets across the board.
“I really think we need to see the actual traditional equities market resume chugging up every single year in a bull market fashion in order to actually see this though,” Fernando told Insider.
He added that as crypto becomes more “mainstream” investors will treat their investments like traditional equities, which is what brings the correlation between the two even closer. “This issue,” per Fernando, is that people are thinking of ethereum as “just another tech investment.”
Ethereum’s highly anticipated series of network upgrades, called The Merge, may also contribute to overall adoption of its network. The next upgrade, which is slated for September, will transition the network from an energy intensive proof of work to a proof of stake consensus mechanism.
Amid crypto’s rocky market cycle, the asset class has shown signs of potential recovery, however. Ethereum is up 42% in the past month, according to Messari, while Bitcoin has risen 17% in the same time frame. This follows a slew of bearish news for the space which has left investors – both institutional and retail – accessing systemic risks and contagion concerns for the ecosystem. In the past month, centralized lender Celsius and brokerage Voyager Digital both filed for bankruptcy.