We have launched Cryptogram, an India-focused free weekly newsletter on blockchain tech, global crypto markets, and Web 3.0 technologies which promise to change our future. If you would like to subscribe to this newsletter, click here. You can read our past editions here.
The much-awaited Ethereum Merge took place on September 15, and it is definitely the most ambitious upgrade in Ethereum’s history so far. The Merge retired Ethereum’s previous proof-of-work (PoW) consensus algorithm, exchanging it for the new proof-of-stake (PoS) system. The Merge has reportedly cut down on Ethereum’s energy consumption by over 99%. However, even after the Merge’s successful completion, the ETH token is holding onto a downtrend.
Amidst the broader crypto market bear run, many believed Ethereum would be reachieving $2,000 price levels post-Merge. However, even after the Merge came to pass, Ethereum had been roaming around the $1,340 mark. Into the last week of September, ETH is hovering around $1,310.
.png?w=640&auto=format%2Ccompress)
<source: Binance, tradingview>
Meanwhile Ethereum’s market cap has also declined steeply, and is only slightly over $160 billion as of the last week of September, 2022.
So what exactly is impacting Ethereum’s price? Analysts believe Ethereum is being subjected to the long-standing ‘buy on rumors and sell on news’ rule by the traders. This, added to the US Fed’s rate hikes is what’s primarily affecting ETH prices. As the US government signifies Ethereum is better suited to be a security than a commodity, crypto traders have lost their cool over the fear of increasingly tighter regulatory measures and tax implications. Yet another reason behind Ethereum’s decline could be the fact that many believe the new PoS mechanism might also be making Ethereum less decentralized than its previous PoW network.
The Merge is slated to bring many exclusive benefits to the Ethereum network. While the larger market remains positive regarding the success of the effects of The Merge, any large-scale problems caused by the transition could definitely spell Ethereum’s further decline in the short-term. At the moment, the fact that Ethereum 2.0 has benefited Ethereum’s ESG compliance in attracting many large institutional investors to it. While experienced crypto traders monitor Ethereum’s price movements closely, more adoption of ETH will surely lead to more transactions and therefore higher yields.
Use promocode TNM51 at www.giottus.com/profile#promo after registration to get Rs.51 worth free Bitcoin.
Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.