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The price of Ethereum may show dynamics independent of other cryptocurrencies after the merger, as staking would make it the second largest cryptocurrency with capitalization similar to bonds
The price of Ethereum may show dynamics independent of other cryptocurrencies after the merger, as staking would make it the second largest cryptocurrency with capitalization similar to bonds or commodities. This was noted in the Chainalysis study.
16/ Learn more about these on-chain metrics to learn more about the potential impact of the merger on the crypto markets. https://t.co/9uuvX8Kn6T
— Chainalysis (@chainalysis) 7 September 2022
The merger, which will take place on September 15-16, will result in a surge of active interest from institutional investors. Expected yields of 10-15% per year will tempt them. The indicator will exceed the yield of financial instruments such as bonds and commodities.
According to Chainalysis, the number of Ethereum institutional investors (with over $1M ETH equivalent balance) is “growing steadily” from less than 200 in January 2021 to ~1100 by August of this year.
A faster increase in the indicator after The Merge would confirm the hypothesis that the institution is “considering capitalizing the second largest cryptocurrency as a really good profit strategy”.
Experts also noted the discrepancy between Ethereum’s price and its synthetic counterparts, which releases value locked in the smart contract.
“Shanghai Update (6-12 months after Merger) […] It will allow the asset to be withdrawn, which will provide more liquidity for players and make staking more attractive.”says report.
Experts noted that with a reduction in energy consumption “more than 99%”, environmentally friendly mining is rejected. This will increase the comfort of investors aiming to comply with ESG standards.
Recall that Ethereum developers enabled the Bellatrix update. The upgrade is the last step before migrating the mainnet to the Proof of Stake (PoS) algorithm.
Earlier, Glassnode analysts concluded that the Ethereum cryptocurrency will become deflationary after The Merge is activated.
In April, former BitMEX CEO and co-founder Arthur Hayes predicted that Ethereum would rise above $10,000 by the end of 2022. He also suggested that the asset would be treated like a commodity bond.
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I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.
