It’s a big week for ethereum: its big meltdown is scheduled for Thursday and investors could see a big price move when it happens.
And that’s on top of pre-existing economic factors that have strangled ethereum, which fell below $1,600 on Tuesday after the launch of August inflation data Tuesday.
The major network upgrade will see ethereum transition from proof-of-work to proof-of-stake. The update will address concerns about its environmental impact and dramatically improve its transaction speed, among other improvements, according to Ryan Grace, director of digital assets at Tastytrade, a financial network that focuses on market analysis.
“While many variables influence the price of ETH, the move to proof-of-stake is estimated to reduce the amount of ETH issued per block by around 80%,” says Grace. “It will also result in more efficient and cheaper transactions, which could lead to increased demand across the ethereum network.”
Experts have also said the merger has the potential to boost the value of ethereum, which like bitcoin faces ongoing challenges amid broader economic uncertainty. Therefore, ethereum prices could still rise in the coming days, and they could also fall, with another Fed interest rate hike expected to be announced next week. In other words, and as always, The only thing you can really count on is more volatility.
Ethereum Price: What’s Happening?
Ethereum, bitcoin, and other cryptocurrencies continue to be as volatile as ever, largely driven by ongoing macroeconomic uncertainty.
Ethereum has hovered between $1,400 and $2,000 in recent weeks. After rising for the past week, the price of ethereum crashed on Tuesday following the release of August inflation data. While a successful merger could boost Ethereum prices, another Fed interest rate hike next week could send them down again.
Cryptocurrencies have been moving along with stock markets in recent months, which have had a rough year amid rising inflation, weakening investor confidence, rising interest rates and recession fears. . The S&P 500 is down more than 13% in 2022, while the tech-heavy Nasdaq has been hit harder, down 23% this year.
Experts are divided on the next directional move for ethereum. While some believe that the merger will be transformational for ethereum and will significantly increase its price, others are more skeptical. Whatever happens to the price of ethereum in the coming months will ultimately depend on the success of the merger. Such a large software update can easily be susceptible to bugs or glitches, so the result of the merger has huge implications not only for the Ethereum network but for all cryptocurrencies.
“This merger has been talked about for a long, long time, and it’s finally getting closer. And I see it as a great catalyst for attention to return to altcoins,” Osprey Funds CEO Greg King told Coindesk. It has a lot of potential – they just need to solve their bottleneck problems. The merger should help with that.”
What should crypto investors know about the Ethereum merger?
After years of being the leading smart contract blockchain, ethereum is transitioning to a less power-hungry technology. So what does this mean for your cryptocurrency investments?
Some experts say that there are advantages for ethereum investors, but it is impossible to say for sure. Some are calling for the price of ethereum to rise above $10,000, while others remain bearish. But it is all purely speculative at this point – many are waiting to see how investors and companies building their technology on the ethereum platform respond to the changes.
In any case, the merger should not affect your long-term investment strategy. It will take a while for everything to be in place, and other factors, such as increased regulation, could affect ethereum and other cryptocurrencies during this time. Instead, use this time to focus on strengthening your understanding of crypto and blockchain technology and assessing your crypto risk tolerance.
Experts recommend keeping less than 5% of your portfolio in cryptocurrencies because it is a very new speculative asset class. As with any investment, don’t invest more than you’d be okay to lose.