After years of waiting, the “Merge” is set to happen for the Ethereum network in just a matter of days, potentially around September 15th.
The Merge marks a complete overhaul of how the Ethereum network operates.
This is where it shifts from the proof-of-work algorithm (using a lot of specialised computers to track and validate transactions on the network) to proof-of-stake (people put up their Ether as a “stake”, in order to validate those transactions).
The hype surrounding this pivotal event has certainly propelled prices of the world’s second-largest crypto by market cap in recent months.
Recall how, back in mid-June, Ether plummeted to its lowest levels since early-2021, falling to as low as $880.70 on intraday prices.
Since then, its prices have almost doubled (!), trading above $1700 at the time of writing.
For comparison, Bitcoin has only managed to climb about 27% during the same period, since reaching a near-2-year low back in mid-June.
Ether proponents would surely be hoping that a successful Merge this week would translate into higher prices over the immediate term.
Such gains would be based on the hopes that the network’s post-Merge adoption would be more widespread, having transitioned to the more energy-efficient software.
Still, crypto participants remain on alert over potential hiccups to the actual event, with some traders hedging against a potential sell-the-news drop post-Merge.
Heightened volatility in the ensuing aftermath may also trigger automatic liquidation of assets and tokens linked to the Ethereum network.
Ether gains need proof of smooth “Merge”
After years of hype, it’s time now for the “Merge” to deliver, though there remains a fair bit of uncertainty as to how Ether’s prices may react as an immediate aftermath.
After all, a lot of the anticipation has already been priced in leading up to the “Merge” (hence the 90+% gains since June as mentioned earlier), which suggests there’s less reason for a post-Merge pop.
On the other hand, any hiccups in this major transition could instead see Ether’s prices falter, amid heightened fears that this nascent yet seismic shift in technology is not yet a done deal.
Ultimately, Ether may have to really punch above $2000 and shrug off bouts of broader risk-off sentiment across financial markets, in order to get more bulls onside to keep prices elevated.