What impact will the Merge have on the price of Ethereum? The opinion of the experts

While some experts expect ETH price to rise after The Merge update, others are more cautious.

Just a few days separate us from The Merge, which will merge the Ethereum mainnet with the Beacon Chain, a Proof of Stake (PoS) blockchain launched in December 2022.

While the hard forking Bellatrix is ​​scheduled for September 6, The Merge is set to take place on September 13 with the Paris Update, has indicated Bobby Ong, Chief Operating Officer at CoinGecko.

Will The Merge blow up the price of ETH?

In addition to being more ecological than the consensus mechanism energy-consuming Proof of Work (PoW), the PoS version could, according to some investors, bring many advantages to the network.

For example, Justin Bons, founder of Cyber ​​Capital, the first European cryptocurrency fund, pointed out that PoS is much more efficient than PoW both in terms of cost and security. This point was also confirmed by Ethereum co-founder, Vitalik Buterinin a recent interview.

Mr. Bons also underline that half of transaction fees are burned. Therefore, “if the fees received remain the same after The Merge, ETH will become deflationary with negative inflation!”

This would likely reduce Ethereum’s total supply and increase its value for those who already hold it.

Obviously, these predictions contributed greatly to the volatility of the price of ETH while fueling the enthusiasm of the followers of the network. According CoinGeckoETH price rose 8% to hit $1,560 last week.

Similarly, derivatives traders have strongly bet on ETH. Recently, the open interest of ETH futures reached $6.6 billion, surpassing that of Bitcoin for the first time, which currently stands at $4.8 billion.

Despite Ethereum’s positive trend, Bons still believes the asset is undervalued. “We often wonder if The Merge has already impacted the price of ETH,” he claimed.

“I would say it hasn’t fully impacted the price yet.” Something that Mr. Bons explains by the “disinformation” campaigns which have been carried out by “detractors”.

Will ETH plunge into the red?

Last week, the price of ETH soared 10%, but this surge was preceded by an almost 30% drop around mid-August. A decline that can be explained by the technical difficulties related to The Merge, as well as by the last speech of the chairman of the Fed, Jerome Powell on the aggressive measures to fight against inflation.

So, some feel that all the hype surrounding Ethereum will be followed by a spectacular rug pull. “Isn’t it very clear that the market will continue to rise artificially until The Merge before falling back afterwards? wondered Il Capo Of Crypto in a Twitter post.

Indeed, updating a blockchain that executes 1.3 million transactions per day and houses more than 3,400 decentralized applicationsis a very risky bet.

Therefore, industry players have taken several measures to protect themselves against possible risks.

For example, the decentralized finance platform Aave, suspended Ethereum lending, while Coinbasethe largest crypto exchange in the United States, is considering temporarily suspending withdrawals and deposits of all Ethereum-based tokens.

Although a surge in the price of ETH seems very likely after an update as important as The Merge, the suspension of withdrawals by certain platforms could have an unexpected effect on the asset.


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