Ethereum Price Pumper: The Merge To Include Crypto Deflation Benefits

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The global inflation level is hitting just about every financial asset. Stocks have started to decline, the entire crypto market is trying to find a trampoline to bounce at higher levels, and innovative projects are in survival mode. Thankfully, there is some good news on the way – and all because of the latest merge upgrade that could prove to be an Ethereum price pumper.

The upcoming Merge is only a few days away (only a day if everything happens as planned). This new Proof-of-Stake transition is about to bring many benefits, crypto inflation included.

Ethereum Merge Benefits Aren’t Only About the Environment

The environmental concerns about proof-of-work mining have made people think that a low carbon footprint is the only benefit that comes from Proof-of-Stake consensus. They couldn’t be more wrong. Bloomberg’s latest article has revealed that Ethereum’s renewed approach to crypto will punch down on increasing inflation levels. This is partly because of one reason: ETH will become deflationary crypto.

The current way to mine involves the Proof-of-Work algorithm. It rewards new tokens to miners who use their uber-powerful computer systems to secure the network. As a result, there are 4.5% more Ethereum tokens in the market every year.

The Launch of Ethereum Burn Upgrade

Ethereum’s desire to move to a proof-of-stake came to light when it launched a software upgrade that let owners burn their cryptos. Every time holders use the crypto to do a transaction, a portion of it is burned – reducing the total number of ETH available in the market. That led to its scarcity to increase the token’s value, which, in turn, saw the Ethereum price swinging upwards as it got closer to $4k.

But that was not enough to turn this crypto deflationary. And while $6 billion worth of ETH was burned until March 2022, the 4.5% yearly increase wasn’t enough for ETH to sustain a good standing.

That is why the latest merge upgrade is a much bigger achievement for this altcoin than that burn upgrade. The foundation has said that it will reduce the inflation supply of Ethereum to zero. But before that happens, predictions say that the supply of ETH will peak for a time.

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And once the decline sets in, the Ethereum price might experience a pump. That is, the Merge is a bullish development for Ethereum. The price has gone from $1502 to $1763 during the last four days.

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Will the ETH deflation Begin as soon as the Merge Upgrade Arrives?

One of the many questions asked by the crypto crowd about the merge upgrade is if Ethereum will enter the deflationary stage as soon as the Merge upgrade arrives. Unfortunately, the answer is no. Consensys, a leading Ethereum software company based in New York, has stated that the burn rate will determine how soon the deflation arrives. That, in turn, will be determined by the number of transactions on the platform. So, the latest timeline that we have about the deflation to set in is Spring 2023.

But it is also wise to remember that Ethereum’s Merge has had a long and turbulent history, filled with many bugs and failed upgrades. So, the crypto ecosystem has a fair degree of apprehension about this latest upgrade. If the Merge fails – which we hope doesn’t – ETH’s value can go down and impact other ETH-based crypto assets.

Thankfully, Ethereum has taken all precautions, like the Ethereum Bug Bounty. Developers get invitations to discover potential system bugs that can derail the upcoming launch. So far, there have been no issues. And if there were, it has been kept under wraps.

The Merge’s Impact on the Crypto Market

Ethereum is the biggest altcoin in the world, with its blockchain being the foundation of many other crypto projects and Dapps. If the Merge is successful, Ethereum’s upswing will also pull other cryptocurrencies up. And if the latest Merge is about to fix the biggest pain points of Ethereum – high fees and low speeds – its adoption rate will likely take another step upwards.

A lot has been riding on this upgrade, not just the fate of other cryptos. The ecologically friendly route ETH has taken will have a larger impact on the government’s decisions to accept cryptocurrency as a viable financial technology.

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Source: https://insidebitcoins.com/news/ethereum-price-pumper-the-merge-to-include-crypto-deflation-benefits