Raoul Pal On Ethereum Price: ETF To Create a ‘Banana Zone Squared’

Raoul Pal, CEO of Global Macro Investor and Real Vision, is bullish on the impact of an Ethereum (ETH) exchange-traded fund (ETF) on the crypto world. He is optimistic that demand for an Ethereum ETF could lead to a major price surge.

Push Factor for Ethereum Price Action

Pal shared his insights in a post on X to members of the community. This is coming just days before the likelihood of the United States Securities and Exchange Commission (SEC) taking a decision on the much-awaited spot Ethereum ETF.

According to Pal, a combination of factors could see this happen real fast. He highlighted these factors to include the high demand for the spot Ethereum ETF, the fact that approximately one-third of ETH remains staked, and the token-burning mechanism.

The presence of all the aforementioned could drive the price of Ethereum into what he describes as a “banana zone squared.” Notably, if approved, the potential for a massive demand for Ethereum ETF could significantly increase the buying pressure on ETH. This will naturally cause a spike in price.

Additionally, given the staking dynamics with Ethereum, around 30% of ETH is effectively removed from the market. This percentage is staked to validate its network operations as a Proof-of-Stake (PoS) protocol. This reduction in circulating supply could amplify the price effects of increased demand.

Pal also highlights the token-burning mechanism of the network. Ethereum’s mechanism of burning a portion of transaction fees guarantees a reduction in the supply of ETH. That is, as network activity rises, the rate of burning increases, intensifying the supply squeeze.

ETF Potential on the Broader Crypto Market

Pal suggests that these factors could lead to a notable price increase for Ethereum, entering what he metaphorically calls the “banana zone squared” – an extraordinary and unprecedented rise in value. 

As per the current market data, Ethereum is currently trading at $3,771.78, up 22.38% in the past 24 hours.

Amid this bullish trajectory, if the combination of staking and burning creates a deeply negative net supply scenario, the asset will skyrocket almost beyond its previous All-Time High (ATH) of $4,891.70. Also, as more Ethereum is locked in staking and more tokens are burned, the available supply for trading diminishes. All these compound the price effect

Pal’s analysis and predictions paint a picture of the potential of an Ethereum ETF on the crypto market. While stakeholders anticipate the SEC green lighting spot ETH ETF, investors look forward to an explosive price environment for ETH.

Read More: SEC Sets Deadline For Ether ETF Filings Edit, Approval Ahead