Crypto Markets Get a Boost as Ethereum Consolidation Approaches
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(Kitco News) – Cryptocurrency proponents were delighted with the sight of Monday’s price rally as Bitcoin (BTC) briefly traded above $24,000 while Ethereum (ETH) surged above $1,800 for the first time since early June.
While Tuesday’s price action saw most of Monday’s gains return, the ecosystem remains puzzled as to what drove the overall rally that gave crypto traders a taste of what it’s like to be back in a bull market.
The consensus from some of the biggest companies on Wall Street is that Ethereum has been the driving force behind the recent gains as the upcoming merger, which is expected to take place on September 19, has excited crypto-believers enough to pull them out of the depths. From winter encryption.
The term “consolidation” refers to the ongoing transition of the Ethereum network from a Proof of Work (PoW) consensus mechanism to a Proof of Stake (PoS), a process that has been underway for several years.
According to JPMorgan analyst Kenneth Worthington, the approaching merger has given the market a boost and many expect the price of Ether to rise once the merger is complete.
In a note to clients on Monday, Worthington suggested that the “real driver” of recent gains in the market “was the Ethereum consolidation and positive data following the launch of the Sapolia testnet in early July and the Ropsten testnet in June, indicating that the consolidation is viable in 2022.”
Ethereum-based digital asset investment products have also seen a surge in investments, according to CoinShares’ latest digital asset fund flows report, which notes that Ethereum has seen inflows totaling $16 million and has enjoyed nearly seven consecutive weeks of inflows totaling $16 million. $159. million.”
According to CoinShares analysts, “We believe this shift in investor sentiment is due to increased clarity on the timing of the consolidation as Ethereum shifts from Proof of Work to Proof of Stake.”
Unintended consequences of merging
While the widespread consensus among the crypto community is that the upcoming consolidation is a good thing, the process has not developed without its own set of controversies as Ether miners struggle to lose their livelihoods.
As a result of moving away from Proof of Work, some in the community have pushed for the creation of ETHW, an Ethereum fork and a native asset of the ETHPoW chain, a potential new chain backed by Ethereum miners.
At the time of writing, ETHW is trading at $91.41 after first going on multiple exchanges at $30 and trading at $140 on Monday.
While some are concerned about the impact another Ethereum fork will have on the strength of the broader Ethereum ecosystem, it’s not a huge concern for co-founder Vitalik Buterin who stated, “I don’t expect Ethereum to be really much damaged by another fork” while addressing the crowd at Recent ETH Seoul developer event.
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