Ethereum Won’t Be Much Better After The Merge, So Why Is It Up By 49%?

Hello Bubble Riders! For those of you who don’t know what “The Ethereum Merge” is – here’s a small recap. 

The Merge represents the joining of two parallel systems: Ethereum (PoW) and The Beacon Chain (PoS). This will effectively be the end of Proof-of-Work for Ethereum and allow for more scalability that was not previously possible. You can see more about their switch to Proof-of-Stake and their plan here.

This all sounds fantastic! And the recent market rallies we’ve been seeing for ETH and Alt-coins (up 49% since June 18, the lowest point in the last 12 months) is in part due to anticipation of this merger. But what if people are wrong? Here we look at a few misconceptions associated with The Merge. 

  1. Ethereum gas fees will reduce after The Merge

While lower gas fees are the number one desire of all investors, The Ethereum Merge is a consensus mechanism modification that will switch the Ethereum blockchain from proof-of-work to proof-of-stake (PoS). In order to lower gas fees, Ethereum will need to work on increasing the network’s throughput and capacity.

  1. Ethereum transactions will be faster after The Merge

We can presume that Ethereum transactions won’t be significantly quicker. Although Ethereum experts predict that switching to PoS will enable a 10% increase in block generation, users won’t notice the tiny difference.

  1. Investors will be able to withdraw staked ETH after The Merge

The Beacon Chain is currently locked with Staked ETH (stETH), a coin that is backed 1:1 by ETH. The upgrade does not enable this change, according to the developer community. The Shanghai upgrade, the subsequent significant upgrade after The Merge, will enable withdrawal of stETH holdings. Because of this, the assets won’t be able to be used for at least 6 to 12 months after the merge.


If you found this helpful, Subscribe to The Art of the Bubble’s free newsletter.

Join us on Discord for live chat and daily updates.

You found this content helpful ?

  1. 1
    Join our free weekly "Bubble Bulletin" for more
  2. 2
    Join us on Discord for live chat and daily updates
  3. 3
    Follow us on Twitter
  4. 4
    Share this content using the buttons below :

Disclaimer

This piece of content is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes 1.2 Labs products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.

You should expect no financial returns one way or another based on statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC.

If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. You are also encouraged to do your own due diligence before investing in anything.

RELATED POSTS:

December 5, 2022

June 11, 2021

June 5, 2023

August 18, 2022

October 18, 2022

August 24, 2022

August 11, 2023

April 16, 2024

October 3, 2021

LATEST POSTS:

May 16, 2024

May 15, 2024

May 14, 2024

May 9, 2024

May 8, 2024

May 7, 2024

May 6, 2024

May 2, 2024

May 1, 2024

What do do now?

Join the free 1.2 Labs "Bubble Trading" Bulletin for new trading strategies, macro & sentiment analysis and occasional free airdrops