Ethereum

Ethereum’s [ETH] Merge talk investors shouldn’t miss out on

Published

2 years ago

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Source: Pixabay

The news of the Ethereum Merge pumped up optimism on the network. However, ETH, at press time, was consolidating above $1600 as the Merge craze started easing coming into the weekend.

In the current relief rally, ETH has outperformed the king coin by achieving a 19.07% increase in the last seven days. Now, the question remains- Will the king alt be able to carry the momentum into the Merge release in September?

ETH’s current performance can answer

This week has been a resurgence for Ethereum as it continues to steer through the bear market.

Investors saw a sharp rise over $1,600 after being exposed to dramatic lows below $1k in June. But the Merge release date around September has surely impacted the trajectory of the altcoin.

The transition is expected to be a fruitful addition to the network. The Merge would lead to higher profitability across the Ethereum network in the coming months as per an IntoTheBlock analysis

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While inflation continues to plague the global economy, Ethereum is set to become the largest deflationary currency.

Ether issuance is expected to drop by 90% after the Merge. In the wake of the EIP-1559 release last year, 80%- 85% of transaction fees are burnt.

This is likely to lead to more ETH getting burned than issued.

Currently, staking ETH produces yields at 3.9% which is expected to surge to 6% to 7%.

Higher staking yields will, in turn, lead to more ETH being staked. This will lead to greater security since it would become more costly to acquire 51% of the ETH staked.

Source: IntoTheBlock

Increasing yields will mean higher profitability for staking providers such as Lido.

Those staking ETH won’t be able to withdraw funds until 6-12 months after the Merge. The staked ETH on Lido will only grow in that scenario.

Source: IntoTheBlock

Now, if macro conditions continue to worsen, the situation could change completely for investors. Nevertheless, traders’ optimism remains high on Ethereum as they carry a lot of expectations ahead of ETH’s Merge release.

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