Ethereum jumps 12% as merger nears
Key points to remember
- ETH is outperforming in the market. It touched $1,363 today after rising 12%.
- The latest rally comes days after the Ethereum Foundation set a tentative September 19 launch date for “the merger.”
- The merger of Ethereum with proof of stake is the most anticipated update in the history of the network.
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The rally comes two days after Tim Beiko suggested a tentative September 19 launch date for the long-awaited Ethereum proof-of-stake merger.
Ethereum rallies amid merger hype
Ethereum breaks out.
The number two crypto recorded a 12% rally on Saturday, briefly touching $1,363 for the first time in a month. It has since posted a slight cooling, currently trading at around $1,355.
The rally in ETH led to a rebound in the market, helping assets like Synthetix and Avalanche reach double-digit gains. Lido-staked ETH also surged around 12.6%, while LDO, the governance token of Lido DAO, is up 22.8%. Interestingly, BTC gained around 3.2%, suggesting that Ethereum is leading the current rally despite Bitcoin’s dominance in the market.
While the exact reason for the jump is unclear, improving sentiment surrounding Ethereum and its upcoming “merger” with proof-of-stake may be a factor. On Thursday, the Ethereum Foundation held its last Consensus Layer Call in which the merger was discussed. Ethereum Foundation Fellow Tim Beiko suggested a tentative September 19 launch date, dropping the strongest hint yet that the merger could be weeks away.
Before the merger can take place on the mainnet, Ethereum is expected to go through a final test on the Goerli network in the coming weeks. The final launch will follow, although Beiko stressed that the mid-September date is only tentative and could change.
The merge update involves merging the execution layer and the consensus layer of Ethereum to move the network from proof-of-work to proof-of-stake. This is expected to reduce network power consumption by 99.95%, but the merger has also been widely seen as a bullish catalyst for ETH, as it is expected to reduce network emissions by around 90%. By moving to Proof-of-Stake, the network will no longer pay miners and instead offer fees exclusively to validators. As Ethereum also burns some of its gas fee supply via EIP-1559, it is believed that ETH could become a deflationary asset after the update. According ultrasound.silverif the merger ships on September 19, ETH supply will peak at 120.2 million and slowly begin to deflate over time.
As the merger narrative begins to take hold following the Ethereum Foundation’s latest appeal, the market may now be gauging the impact of the update despite the months-long slump that has hit ETH and ETH. other crypto assets this year.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.