Additional boost through merge?
Hopefully, what is long lasting will soon be good: The ETH merge, which has been announced for months and has already been postponed several times, is finally scheduled to take place in September. The mining process will be changed from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This “beacon chain” has already existed since 2020 and will be used to validate new transactions after the merge. The concept should in all likelihood work, as it is already being used successfully by competitors such as Solana and Avalanche. The aim is to ensure more time-efficient, resource-saving and secure data traffic.
After successful simulations a few months ago, Ethereum developers have recently reported further progress and will hold a series of events for potential stakers and other members of the community in the coming weeks. Still, euphoria is premature: Mati Greenspan, founder and CEO of Quantum Economics, warns, “The merge itself is an extremely risky event where anything can go wrong.” And even if the merge technically works, this by no means ensures that it will trigger a sustained ETH rush.
Green cloak with flippening opportunity
The switch from PoW to PoS brings a decisive advantage: the eco-balance improves significantly. The energy requirements of Ether mining are said to be reduced by 99.9 percent, making ETH the significantly greener alternative to BTC. It is precisely the energy consumption that particularly pisses off crypto critics and leads to worldwide measures against energy-intensive mining.
If ETH suddenly rises to become the “green hero” of the altcoin scene with functioning PoS technology, the question naturally arises as to whether Ethereum can outstrip Bitcoin. The “flippening” – the overtaking, if you will – seems to be getting closer. For example, according to “CoinMarketCap”, Bitcoin’s crypto market share was still 70 percent in January 2021, but now the ur-cryptocurrency accounts for only 40 percent of the sector’s total market cap. QCP, a crypto trading firm, also sees Ethereum performing well in the short and medium term. The crypto services firm said that “an incredible amount” of Ether call options had come in over the past few days, adding that buyers included many cash-rich hedge funds.
Outperformer
In recent weeks, ETH has outperformed the overall crypto market. The number two sin the past four weeks by more than 50 percent to currently just under $1,700. Bitcoin was unable to keep up this pace, rising only about 15 percent to just over $23,100. However, even if ETH shortens the gap, there is still a large gap: ETH brings it to a market capitalization of $206.4 billion, whereas all BTCs are worth a combined $442.1 billion. So there’s still a long way to go for ETH, but maybe the merge in September will provide the decisive push…