The Merge upgrade on Ethereum network took place on 15th September 2022. The upgrade is one such event in crypto space that could make into the news even today. Given the potential and expectations from the upgrade, the whole crypto community waited for the event and it was expected to bring enormous success to the network.
The success for the network followed by the upgrade was expected to elevate Ethereum in both technical and value. All this is fine but why is the topic in crypto news today? It’s due to the recently reported Ethereum (ETH) dump.
Prominent analytics firm Santiment noted that large Etheruem holding wallets—holding up to 1 million ETH—have dumped billions worth of native crypto asset. These shark and whale addresses were seen to sell-off about 3.3 million ETH worth 4.2 billion USD. The notable dump was seen during the last five weeks, clearly after the biggest upgrade within the crypto space, the Merge.
The Merge took place in the month of September after a long time of announcement, development and delays. Following the upgrade, the native crypto asset Ether (ETH) along with the related cryptocurrencies like Ethereum Classic (ETC) have seen significant growth in their value.
Nevertheless, the ongoing crypto winter did not let the crypto assets enjoy the trail for long and made them drop even after the hype around the most awaited event. Ethereum (ETH) has seen a drop of nearly 12% from its price at the time of the Merge event and is currently trading at 1319 USD.
The aforementioned dump of ETH is now being considered as a potential reason behind the drop in price of the crypto asset.
Prior to the upgrade, the onchain analytics firm indicated the possibility of such an instance of drop in ETH price given the ‘sell-the-news’ sentiment soon after the Merge.
The report sought the formation of volatility seen during the months of October and September. Such events pushed traders to go for dumping the crypto asset.
Although the merge made Ethereum network transition from proof-of-work to proof-of-stakes consensus mechanism, it brought several issues with it. One such issue is with a steep drop in ETH mining given Ethereum network does not need so many miners or validators to validate transactions.
Earlier TheCoinRepublic reported the impact of the upgrade on ETH burn. According to the report, the number of ETH being issued following the Merge has reduced up to 60%.
Earlier than the merge, the production rate of new tokens introduced within the ecosystem was around 3.66% every year. Post merge the rate of ETH issuance dropped to 0.07% per year. The number is comparatively lesser even than bitcoin whose issuance rate is approx 1.72%, as both BTC and ETH are subjected to being compared over many factors, it added.
Source: https://www.thecoinrepublic.com/2022/10/17/crypto-news-today-ethereum-whales-dump-significant-eth-holdings/