Ethereum (ETH) is not immune to the current crypto bear market as large selloffs continue. The 2nd largest crypto currency is bouncing around the $100 mark, down 75% from an ATH of $4800 hit in November’s peak last year.
The Ethereum community is waiting will baited breath for the upcoming merge as believe that this will help ETH regain some traction. The 2.0 merge is a migration from proof of work (PoW) to proof of stake (PoS). This combined with many Ethereum projects, including Ethereum “Layer2” solutions such as Loopring (LRC) will increase transactions and boost further adoption.
Ethereum price will trigger gains
The core developed of the ETH network, Tim Beiko, had previously said that The Merge would happen in August this year. However, it was later announced that the network would delay the difficulty bomb, which could delay the merge.
However, Glen Goodman, a crypto consultant at eToro, believes that the process will trigger price gains despite the time the merge happens. However, Goodman admitted that the process would also present risks.
According to Goodman, Ethereum’s transition to PoS will come with benefits, such as lowering the network’s energy usage by 99%. Ethereum currently uses an energy-intensive PoW consensus. Bitcoin uses the PoW consensus, and mining activities have been speculated to consume more energy than some countries.
Goodman said that the merge will give ETH “a major advantage over Bitcoin, as big investors are often under a lot of pressure to be environmentally-responsible in their investments.” As more people buy Ethereum because of environmental sustainability, the buying pressure could trigger gains.
The merge will also solve issues faced by the users of the Ethereum network, such as slow speeds and high gas fees. With PoS, Ethereum could attract more decentralized apps (DApps), boost utility for Ether, and gradually rising prices.
The merge also presents challenges
While the benefits of the ETH network can be seen, there are also risks posed when the network switches to a PoS consensus. It is believed that the merge will make the Ethereum network vulnerable to being dominated by some coin owners who own many coins.
While PoW is energy-intensive, it has been hailed for its focus on security. The merge could make Ethereum vulnerable to hacking attacks that have become prevalent in crypto. This could affect the strides the network has made so far to dominate the DeFi industry.