What Are Ethereum’s Prospects after the Merge?

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Ethereum is the talk of the entire crypto market at the moment. The asset has managed to break one milestone after another this year alone, and while the market remains in decline, it will undoubtedly be one of the assets to look forward to when things turn bullish again.

The biggest news around Ethereum right now is its Merger. The update, which will mark the final change to Ethereum’s proof-of-stake (PoS) consensus algorithm, may be the biggest update to the Ethereum blockchain in its history. And, as developers continue to work out the details, investors are also trying to come to grips with what that could mean for the broader market landscape.

The Merger: What And Why?

As explained earlier, the Merger will mean the final shift of the Ethereum blockchain to PoS. The blockchain is one of the oldest and probably the most popular in the market, but it was built using the proof-of-work (PoW) consensus algorithm. This meant that the blockchain had to rely on mining, just like Bitcoin.

Over the years, Ethereum has grown into a global blockchain network with multiple use cases. And, as the application of blockchain technology soared, so did the functionality of Ethereum itself. Today, millions of developers use Ethereum, and the blockchain is home to hundreds of thousands of platforms. From traditional businesses to fledgling new fields like decentralized finance (DeFi) and non-fungible tokens (NFTs), Ethereum’s footprint is everywhere.

This increased popularity has been both a blessing and a curse. On the one hand, it made Ethereum incredibly popular. However, it also caused scalability issues and rising gas fees.

Ethereum 2.0 is expected to be a solution to all this. The development will bring several benefits to the blockchain, including sharding, a way to improve its scalability. With sharding, the Ethereum blockchain is expected to handle up to 100,000 transactions per second, up from around only 30 currently.

Likewise, the move to PoS means that the Ethereum blockchain could easily cut its carbon footprint.

According to some estimates, the carbon footprint of the blockchain could be reduced by up to 99.9% after this update is completed. And, the Merger is the final stage for this.

Analysis: What Will the Merger Do for Ethereum?

Currently, the Merger is in its last stage and expected to come anytime soon. However, with developers excited about the prospect of the Ethereum blockchain getting a fresh start, it’s also worth looking at what this development could mean for the blockchain as a whole.

The first, and perhaps most significant, note is that the Merger could easily trigger a rally in Ethereum’s price. As the market sentiment shows, the crypto space is currently looking for something bullish to start the next run. And, with the market weighed down by bad news over the past few months, a successful Merger should help erase some of this negative sentiment and usher in an era of gains.

At the same time, Merge’s upside potential stems from the fact that it will improve the Ethereum blockchain on several fronts. By improving scalability and cutting transaction fees, the Merger should make the Ethereum blockchain useful, which, in the long run, will trigger a rally in the price of ETH and help it grow even more.

Ethereum’s year-to-date chart shows that the asset is suffering from a 58% drop since the year began. If it hopes to eliminate some of these losses, then it will have to start somewhere. The Merger, if successful, presents a possible starting point.

Macro Factors Still Strong

That said, it’s worth noting that a rally fueled by the Fusion isn’t a sure thing. The crypto market has been dealing with heavy losses for months, and the chance of the Merger simply wiping all of that out is slim.

This week alone, the Federal Reserve issued numbers on the Consumer Price Index (CPI). While analysts expected a softer figure, the report showed headline inflation in the US jumped 0.1% month-on-month. And, even though gas prices fell to monthly lows and the housing market appears to be finally cooling, core inflation still jumped 0.6% in August. Annual inflation sits at 8.3%, showing that the government still has a lot of work to do to fix the economy.

The report immediately sent markets tumbling. The Dow slipped 2.6% on the day, while the S&P 500 and NASDAQ Index fell 2.9% and 3.6%, respectively. With the crypto market incredibly correlated to stocks, currency prices fell just as well. Bitcoin retreated 9%, while Ether fell 7.28%.

Macro factors are expected to continue to play a significant role in determining the prices of cryptocurrencies over time. And, with the traditional economy still struggling, that means we could see a while before the gains coming from the Merger and others start to show.

Of course, this is not necessarily a bad thing. The Merge presents an opportunity for developers to build and imagine as they should. And, when things start to cool down and we enter another rally, the Ethereum blockchain would become much better and more stable for developers across the board. This should lay the foundation for more resilient gains.

Ethereum is the talk of the entire crypto market at the moment. The asset has managed to break one milestone after another this year alone, and while the market remains in decline, it will undoubtedly be one of the assets to look forward to when things turn bullish again.

The biggest news around Ethereum right now is its Merger. The update, which will mark the final change to Ethereum’s proof-of-stake (PoS) consensus algorithm, may be the biggest update to the Ethereum blockchain in its history. And, as developers continue to work out the details, investors are also trying to come to grips with what that could mean for the broader market landscape.

The Merger: What And Why?

As explained earlier, the Merger will mean the final shift of the Ethereum blockchain to PoS. The blockchain is one of the oldest and probably the most popular in the market, but it was built using the proof-of-work (PoW) consensus algorithm. This meant that the blockchain had to rely on mining, just like Bitcoin.

Over the years, Ethereum has grown into a global blockchain network with multiple use cases. And, as the application of blockchain technology soared, so did the functionality of Ethereum itself. Today, millions of developers use Ethereum, and the blockchain is home to hundreds of thousands of platforms. From traditional businesses to fledgling new fields like decentralized finance (DeFi) and non-fungible tokens (NFTs), Ethereum’s footprint is everywhere.

This increased popularity has been both a blessing and a curse. On the one hand, it made Ethereum incredibly popular. However, it also caused scalability issues and rising gas fees.

Ethereum 2.0 is expected to be a solution to all this. The development will bring several benefits to the blockchain, including sharding, a way to improve its scalability. With sharding, the Ethereum blockchain is expected to handle up to 100,000 transactions per second, up from around only 30 currently.

Likewise, the move to PoS means that the Ethereum blockchain could easily cut its carbon footprint.

According to some estimates, the carbon footprint of the blockchain could be reduced by up to 99.9% after this update is completed. And, the Merger is the final stage for this.

Analysis: What Will the Merger Do for Ethereum?

Currently, the Merger is in its last stage and expected to come anytime soon. However, with developers excited about the prospect of the Ethereum blockchain getting a fresh start, it’s also worth looking at what this development could mean for the blockchain as a whole.

The first, and perhaps most significant, note is that the Merger could easily trigger a rally in Ethereum’s price. As the market sentiment shows, the crypto space is currently looking for something bullish to start the next run. And, with the market weighed down by bad news over the past few months, a successful Merger should help erase some of this negative sentiment and usher in an era of gains.

At the same time, Merge’s upside potential stems from the fact that it will improve the Ethereum blockchain on several fronts. By improving scalability and cutting transaction fees, the Merger should make the Ethereum blockchain useful, which, in the long run, will trigger a rally in the price of ETH and help it grow even more.

Ethereum’s year-to-date chart shows that the asset is suffering from a 58% drop since the year began. If it hopes to eliminate some of these losses, then it will have to start somewhere. The Merger, if successful, presents a possible starting point.

Macro Factors Still Strong

That said, it’s worth noting that a rally fueled by the Fusion isn’t a sure thing. The crypto market has been dealing with heavy losses for months, and the chance of the Merger simply wiping all of that out is slim.

This week alone, the Federal Reserve issued numbers on the Consumer Price Index (CPI). While analysts expected a softer figure, the report showed headline inflation in the US jumped 0.1% month-on-month. And, even though gas prices fell to monthly lows and the housing market appears to be finally cooling, core inflation still jumped 0.6% in August. Annual inflation sits at 8.3%, showing that the government still has a lot of work to do to fix the economy.

The report immediately sent markets tumbling. The Dow slipped 2.6% on the day, while the S&P 500 and NASDAQ Index fell 2.9% and 3.6%, respectively. With the crypto market incredibly correlated to stocks, currency prices fell just as well. Bitcoin retreated 9%, while Ether fell 7.28%.

Macro factors are expected to continue to play a significant role in determining the prices of cryptocurrencies over time. And, with the traditional economy still struggling, that means we could see a while before the gains coming from the Merger and others start to show.

Of course, this is not necessarily a bad thing. The Merge presents an opportunity for developers to build and imagine as they should. And, when things start to cool down and we enter another rally, the Ethereum blockchain would become much better and more stable for developers across the board. This should lay the foundation for more resilient gains.



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