Crypto Markets Boost As Ethereum Merger Approaches

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(Kitco News) – Cryptocurrency proponents were pleased to see Monday’s price rally as Bitcoin (BTC) briefly traded above $24,000 while Ethereum (ETH) surged above 1 $800 for the first time since early June.

While Tuesday’s price action saw most of Monday’s gains returned, the ecosystem remains in turmoil as to what sparked the widespread rally that gave crypto traders a taste of what it’s all about. is that of being back in a bull market.

The consensus of some of Wall Street’s biggest firms is that Ethereum has been the driver of recent gains, as its upcoming merger, which is expected to take place on September 19, has fired up crypto loyalists enough to pull them out of the deep. of crypto winter.

The “merger” refers to the ongoing transition of the Ethereum network from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS), a process that has been underway for several years.

According to JPMorgan analyst Kenneth Worthington, the approaching merger has given the market a boost of confidence and many expect the price of Ether to skyrocket once the merger is complete.

In a note to clients on Monday, Worthington suggested that “the real driver” of recent market gains “has been the Ethereum merger and positive data following the launch of the Sapolia testnet in early July and the Ropsten testnet in June, indicating the merger is viable in 2022.”

Ethereum-based digital asset investment products have also seen an increase in investment, according to the latest Digital Asset Funds Flow Report from CoinShares, which noted that “Ethereum saw inflows totaling 16 million dollars and enjoys a streak of nearly seven consecutive weeks of entries totaling $159. million.”

“We believe this shift in investor sentiment is due to greater clarity on when in the merger Ethereum transitions from proof-of-work to proof-of-stake,” according to CoinShares analysts.

Unintended consequences of the merger

While the widespread consensus within the crypto community is that the upcoming merger is a good thing, the process has not moved on without its own set of controversies as Ether miners fend off the loss of their livelihoods. .

Following the abandonment of PoW, some community members pushed for the creation of ETHW, an Ethereum fork and native asset for the ETHPoW chain, which is a possible new chain backed by Ethereum PoW miners .

At the time of writing, ETHW is trading at a price of $91.41 after debuting on multiple exchanges at a price of $30 and trading as high as $140 on Monday.

While some worry about the effect another Ethereum fork will have on the strength of the larger Ethereum ecosystem, that’s not a major concern for project co-creator Vitalik Buterin, who said “I don’t expect Ethereum to be really significant. injured by another fork” while addressing the crowd at the recent ETH Seoul developer event.

Disclaimer: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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