The most likely catalyst seems to be news that Ethereum blockchain developers have settled on a date for a forthcoming and long-awaited technology update called the “Merge,” in which the blockchain will migrate to a more carbon-friendly system that could allow it to scale up much more sustainably. As Ethereum is the blockchain that hosts the lion’s share of Web3’s infrastructure—including NFTs, gaming, and smart contracts, as well as the world’s second-biggest cryptocurrency token by market capitalization—the success or failure of the Merge could be a watershed moment for the industry as a whole.
Investors have taken the news of a target date for the Merge—for which preparations began back in December 2020, but which was then perpetually delayed for years—with some euphoria, as many claim to be bullish on the blockchain update. According to a July 14 tweet from an Ethereum developer, the team is aiming to launch the new and improved Ethereum on September 19.
Following the tweet, the price of Ethereum spiked 12.5% within the same day and is now up nearly 40% after a weekend surge.
Similarly, Bitcoin rose more than 5% immediately and is now up more than 12%—from a sub-$20,000 price to above $22,000 per coin, its highest point since June’s collapse of the major crypto lender Celsius.
The rest of the market seems to have seen rallies of varying degrees, in tandem.
But beyond the Merge, some analysts also suspect that the worst of the fallout from the collapse of the Celsius network—as well as the implosion of Tether, which was one of the world’s biggest cryptocurrency stablecoins—may now be over, as they suggest the contagion has reached its limit. Celsius, for its part, filed for bankruptcy last week. According to its filing, it was unable to pay back users who had deposited $4.7 billion in funds.
However, other analysts suspect the upswing may not last, as Bitcoin and Ethereum are already showing signs of slowing momentum, which can occur as they near what are known as resistance points—at which prices run high enough that investors grow wary of buying, and may even start selling.
As of midday Monday, Ethereum is at $1,480, down from a peak of $4,600 last November.
Bitcoin is at $22,220, down from $67,000 in November.
