The Ethereum Merge, opportunity or defeat

A date for the Merge has finally been finalized, and it poses a question for analysts, the dilemma of whether this transition will be an opportunity rather than a problem.

Possible implications of the Ethereum Merge

The Merge is a transition that will take Ethereum from Proof of Work, a system based on mining, to Proof of Stake, based on staking.

This shift is intended to lower transaction fees and is a change in the type of consensus algorithm, with the goal of making everything safer and faster. 

The opportunity will also address scalability, but a programmatic roll up will have to be followed, with the second step taking place the following year. 

The Merge will not only be an opportunity for investors who delay or hold the currency, but also for all Ethereum-based systems and the entire crypto asset. 

Eliézer Ndinga, director of research at 21Shares, said:

“Withdrawals of Ether will not occur until 6-12 months after the Merge, following the Shanghai update. Withdrawals will be limited to six validators per epoch, ie every ~ 6 minutes, to avoid bank runs and keep the network secure”.

According to most analysts, the Merge is a milestone that will reaffirm the seriousness of the Ethereum project both as a platform and as a cryptocurrency. 

The Merge and future value of ETH

Forecasts see Ether rising to $5,700 by 2025 and reaching $14,400 by 2030.

Despite the Federal Reserve being forced to struggle for years with expansionary policy, which has led the country into galloping inflation, periodically raising interest rates causing a natural drag on the price of Ether and most other cryptocurrencies, Buterin’s currency has responded well on a macroeconomic level. 

On July 26-27, the Fed will rule again and forecasts indicate a new rate hike this time between 75 and 100 basis points. 

The US Bureau of Economic Analysis (BEA) on 28 July will release its estimate covering second quarter GDP growth. 

The figure will be watched very closely as any negative confirmation of the second quarter will be the verdict of a technical recession with all the appropriate consequences, including and not only for the cryptocurrency sector.