Ethereum Jumps 12% as the Merge Draws Nearer
ETH is outperforming in the market. It touched $1,363 today following a 12% surge.
The latest rally comes days after the Ethereum Foundation set a tentative September 19 launch date for “the Merge.”
Ethereum’s Merge to Proof-of-Stake is the network’s most anticipated update in history.
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The rally comes two days after Tim Beiko suggested a tentative September 19 launch date for Ethereum’s long-awaited Merge to Proof-of-Stake.
Ethereum Rallies Amid Merge Hype
Ethereum is breaking out.
The number two crypto put in a 12% rally Saturday, briefly touching $1,363 for the first time in a month. It’s since posted a slight cool-off, currently trading at about $1,355.
The ETH rally has led to a bounce across the market, helping assets like Synthetix and Avalanche hit double-digit gains. Lido-staked ETH also jumped just about 12.6%, while LDO, the governance token for the Lido DAO, is up 22.8%. Interestingly, BTC gained around 3.2%, hinting that Ethereum is leading the current rally despite Bitcoin’s dominance over the market.
While the exact reason for the jump is unclear, improving sentiment surrounding Ethereum and its forthcoming “Merge” to Proof-of-Stake may be one factor. On Thursday, the Ethereum Foundation held its latest Consensus Layer Call in which the Merge was discussed. Ethereum Foundation member Tim Beiko suggested a provisional launch date of September 19, dropping the strongest hint yet that the Merge could be just a few weeks away.
Before the Merge can take place on mainnet, Ethereum is set to go through one final test run on the Goerli network in the next few weeks. The final launch will follow that, though Beiko has pointed out that the mid-September date is only tentative and could change.
The Merge update involves merging Ethereum’s execution layer and consensus layer to move the network away from Proof-of-Work and onto Proof-of-Stake. This is expected to reduce the network’s energy consumption by 99.95%, but the Merge has also widely been seen as a bullish catalyst for ETH as it’s set to reduce the network’s issuance by around 90%. In switching to Proof-of-Stake, the network will no longer pay miners and instead offer fees exclusively to validators. As Ethereum also burns a portion of its supply in gas fees via EIP-1559, it’s estimated that ETH could become a deflationary asset following the update. According to ultrasound.money, if the Merge ships on September 19, the ETH supply will peak at 120.2 million and slowly begin to deflate over time.
With the Merge narrative beginning to take hold following the latest Ethereum Foundation call, the market may now be pricing in the impact of the update despite the months-long slump that’s hit ETH and other crypto assets this year.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
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