Title : Cryptoverse: Electric ether leaps on verge of Merge
Aug 16, 2022 06:00 AM ET
It looks like the Ethereum mega-upgrade is happening. Finally,
After years of delays, the "merger" looks all but certain to take place in September, with the cryptocurrency underlying the blockchain undergoing a radical shift to a system in which the creation of new ether tokens is far less energy-intensive.
"It's an exciting time for the Ethereum ecosystem," said Omar Syed, co-founder of smart contract platform Shardeum. "I think there will be drama around the merger, but I don't think there will be any technical hiccups."
Investors seem to agree, as ether has outperformed its big brother, bitcoin.
The ether has now had six consecutive weeks of rallies, taking it from a 1.5-year low of $880 in mid-June to levels near $2,000, although it is a far cry from its November 2021 high of $4,868.79.
Bitcoin has paled in comparison, recovering 37% from its June low to $24,116.
Of course, there are few certainties about the elusive transition, which has been delayed several times, with developers last canceling plans to push the button in June, unnerving investors who began to fear it would never see the light of day.
The merger is also fraught with risk, and the fortunes of the approximately 122 million outstanding ethers, worth about $232 billion, could be at stake if it fails.
Not everyone is happy about the impending merger of the two systems, especially ether miners, whose expensive mining equipment will become obsolete and can also not be used to mine bitcoin.
Moreover, both Tether and USDC—the largest stablecoins—have supported the merger, reducing the likelihood of wider adoption of the parallel PoW chain.
Nevertheless, at least some investors are preparing for a hard fork, or a parallel PoW chain, as indicated by derivatives market positioning.